IRS Deudctions

Tax Deduction Limits

Once you have figured out the amount of your loss, you must apply two limits to the loss to determine the amount you can deduct. The tax deduction limits are the $100 rule and the 10% rule. These tax deduction limits may prevent you from deducting any part of your loss.

The $100 Rule

You must reduce each casualty or theft loss caused by a single event by $100. It does not matter how many items were damaged by the single event. Only a single $100 reduction applies to each event.

The 10% Rule

After each single event loss is reduced by $100, you must reduce the total of all your casualty and theft losses by 10% of your AGI. If you are reporting casualties from more than one event, you apply the 10% rule to your combined losses.


Hurricane related losses

The normal $100 floor for personal casualty and theft losses and the 10% AGI floor are both waived for casualty and theft losses caused by Hurricane Katrina, Rita, and Wilma. The waiver for:

  • Katrina is on or after August 25, 2005,
  • Rita is on or after September 22, 2005,
  • Wilma is on or after October 22, 2005.