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 Q. Which of the following misfortunes does not qualify for a casualty loss deduction?

  a. Property destroyed by a tornado
  b. Loss from a burglary
  c. A car wrecked after a collision
  d. Damage caused by termites
The answer is d

To qualify for a casualty loss deduction, the damage must be caused by an event that is "sudden, unexpected or unusual." You can't write off property loss due to

progressive deterioration, such as damage done by termites or a drought.

Casualty losses for personal assets are limited to the extent that the total amount exceeds 10 percent of your adjusted gross income for the year. In additon, you must subtract $100 for each loss. There are no such limits imposed on business property that is damaged or destroyed in a sudden, unexpected or unusual event. Contact our office for more information on how to turn a casualty loss into a gain on your tax return.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.