Starting Your Business

What are Business Expenses

Casualty Losses

A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.

• A sudden event is one that is swift, not gradual or progressive.
• An unexpected event is one that is ordinarily unanticipated and unintended.
• An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged.

Generally, you can deduct a casualty loss only in the tax year in which the casualty occurred. This is true even if you do not repair or replace the damaged property until a later year.

Use Form 4684 to report your casualty gains and losses.

For more information about casualty or disaster losses, visit the website for the Federal Emergency Management Agency, or call FEMA toll-free at 800-621-3362 (TTY/TDD: 800-462-7585).

Important References:

Publication 547	Casualties, Disasters and Thefts
Form 4684	Casualties and Thefts
Instruction for Form 4684
Form 4797	Sales of Business Property
Instructions for Form 4797
Schedule A (Form 1040)	Itemized Deductions
Schedule D (Form 1040)	Capital Gains and Losses

 Web Links

Federal Emergency Management Agency (FEMA)