Just came in from CPA and senior tax manager: this has been complicated research
- President Trump did approve DR-4486-FL Major Disaster Declaration for Florida on March 25, 2020. This allows casualty or theft losses of personal-use property that are attributable to the declared disaster, in this instance Covid-19 Pandemic. There should be written justification of how the theft is attributable to the Pandemic in your records.
- The deductible amount of the theft loss is the adjusted basis of the property (not FMV – the IRS considers FMV of property subsequent to theft to be $zero).
- When the theft occurred would have bearing on this determination, prior to or post the passing of your mother – the basis step-up/down doctrine may apply.
