The IRS does not allow a deduction from income not earned but you may be able to get a deduction for property damage known as a casualty loss.
Deductible casualty
losses can result from a variety of causes such as car accidents, earthquakes,
floods, fire, hurricanes, or vandalism.
To deduct a casualty
loss, you must itemize your deductions on Schedule A. The amount of
your deduction is limited to the amount of the loss that exceeds 10% of your
Adjusted Gross Income after a $100 deductible
As an example if you
had a $5,000 property loss,and your Adjusted Gross Income is $40,000, your tax
benefit would be as follows
After deducting $100,
you are left with $4, 900 which is $900 above 10% of your Adjusted Gross Income
of $4,000.
Your deduction would
therefore be $900
To claim a property
loss
To deduct a casualty
loss:
·
Type in casualty loss in the search box, top right of your screen, hit the Enter
key
·
Click the jump to casualty
loss link in the search results
Follow the prompts and online deductions
