IRS Deudctions
 

Nondeductible Casualty Losses

What casualty losses are non tax deductible casualty losses?

Losses from progressive deterioration

Nondeductible casualty losses are losses that result from progressive deterioration of your property rather than from a sudden event.

Some examples of casualty losses that are not tax deductible

The followings are some examples of casualty losses that are not tax deductible.

  • the weakening of a building due to normal wind and weather conditions,

     

  • damage caused by termites and moths,

     

  • damage to trees and shrubs from drought or from a fungus, insects, worms or similar pests

If your plans and shrubs were destroyed by an unusual and unexpected infestation of beetles, for example, you can claim the casualty loss tax deduction because this loss was unexpected and sudden.

Other non tax deductible losses (that seem like casualty losses)

In addition to the losses from progressive deterioration, there are other causes of damage or destruction that do not result in a deductible casualty loss. These include damage caused by:

  • Accidentally breaking articles such as china during normal use
  • A family pet
  • A fire that is willfully set
  • A car accident caused by your willful negligence or willful act or the willful negligence or willful act of someone acting for you.

Examples: if you partook in a race and destroyed your car, your loss is a result of a willful act and cannot be a casualty loss deduction. However, if you accidentally turn the wrong way onto a one way street and had an accident, your loss may be claimed as a casualty loss.