What is a Casualty loss deduction for disasters?

A casualty loss deduction applies when sudden property damage is tied to a qualifying disaster. Under OBBBA Sec. 70109, governor-declared state disasters can now qualify as federal ones. The loss uses the lower of adjusted basis or fair market value for the decline, subtracts insurance, then applies a $100-per-event floor and 10% of AGI. For homeowners who sell, the basis can shift, changing the taxable gain. Use Sell your home planning.

Related Terms

What are Itemized deductions?

What is Adjusted basis?

What is a Capital loss?

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Late S election

A Late S Election lets a corporation request IRS S corp status post-deadline.

Late C election

A Late C Election is a request to the IRS for C corporation status after the deadline.

Depreciation

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R&D tax credit

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Clean vehicle

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Residential clean energy

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Augusta rule

The Augusta Rule lets homeowners rent their property tax-free for up to 14 days a year without reporting the income.

Roth 401k

Roth 401(k) lets employees and individuals make after-tax retirement contributions, offering tax-free growth and withdrawals.

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