Definition: If you suffered a loss of personal property due to a casualty or theft, you may be able to deduct this loss as an itemized deduction on Schedule A (PDF). Personal property includes any nonbusiness property, such as your house, car, boat, computer, TV set, or other personal belongings. The loss must be the result of some natural disaster, storm, fire, accident, theft, or vandalism. If you lost money because your bank become insolvent, you may also deduct this loss. Your loss is calculated on Form 4684 (PDF).
There are two thresholds for calculating your losses. The total value of your losses must be reduced by $100 per incident, and then reduced by 10% of your Adjusted Gross Income (Form 1040, line 36).
Also Known As: Casualty loss, theft loss, disaster loss, bank insolvency.
