IRS Publication 547: Casualty, Disasters, and Theft Losses
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No. 15090K Contents What’s New .................. 1 Department of the Casualties, Reminders ................... 1 Treasury Internal Introduction .................. 2 Revenue Disasters, Service Casualty .................... 3 and Thefts Theft ....................... 5 Loss on Deposits ............... 5 For use in preparing Proof of Loss ................. 6 Figuring a Loss ................ 6 Returns 2020 Deduction Limits .............. 10 Figuring a Gain ............... 13 When To Report Gains and Losses ... 16 Disaster Area Losses ........... 16 How To Report Gains and Losses .... 20 How To Get Tax Help ........... 20 Index ..................... 22 What’s New Declaration numbers. A new entry space has been added to Form 4684 for taxpayers who are reporting a casualty or theft loss attributable to a federally declared disaster. For more infor- mation, see FEMA disaster declaration num- bers, later, and the Instructions for Form 4684. Qualified disaster loss. A qualified disaster loss is now expanded to include an individual's casualty and theft loss of personal-use property that is attributable to a major disaster that was declared by Presidential Declaration that is dated between January 1, 2020, and February 25, 2021 (inclusive). However, in order to qual- ify under this expansion, the major disaster must have an incident period beginning be- tween December 28, 2019, and December 27, 2020 (inclusive). Further, the major disaster must have an incident period ending no later than January 26, 2021. This expansion does not include those losses attributable to any ma- jor disaster which has been declared only by reason of COVID-19. Reminders Future developments. For the latest informa- tion about developments related to Pub. 547, such as legislation enacted after it was pub- lished, go to IRS.gov/Pub547. Limitation on personal casualty and theft losses. Personal casualty and theft losses of Get forms and other information faster and easier at: an individual, sustained in a tax year beginning • IRS.gov (English) • IRS.gov/Korean (한국어) after 2017, are deductible only to the extent that • IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский) the losses are attributable to a federally de- • IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) clared disaster. Personal casualty and theft los- ses attributable to a federally declared disaster Mar 15, 2021 Page 2 of 23 Fileid: … tions/P547/2020/E/XML/Cycle08/source 13:46 - 15-Mar-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. are subject to the $100 per casualty and 10% of gain in a QOF, you may be able to elect to tem- help you make a list of your stolen or damaged your adjusted gross income (AGI) limitations porarily defer part or all of the gain that would personal-use property and figure your loss. It in- unless they are attributable to a qualified disas- otherwise be included in income. If you make cludes schedules to help you figure the loss on ter loss. the election, the gain is included in taxable in- your home and its contents, and your motor ve- An exception to the rule above, limiting the come only to the extent, if any, that the amount hicles. personal casualty and theft loss deduction to of realized gain exceeds the aggregate amount Pub. 584-B, Business Casualty, Disaster, losses attributable to a federally declared disas- invested in a QOF during the 180-day period and Theft Loss Workbook, is available to help ter, applies if you have personal casualty gains beginning on the date the gain was realized. you make a list of your stolen or damaged busi- for the tax year. For more information, see De- ness or income-producing property and figure duction Limits, later. How to report. Report the gain as it would your loss. otherwise be reported if you were not making Special rules and return procedures expan- the election. Report the election for the amount Comments and suggestions. We welcome ded for claiming qualified disaster-related invested in a QOF on Form 8949. See the In- your comments about this publication and sug- personal casualty losses. Personal casualty structions for Form 8949 for information on how gestions for future editions. losses attributable to a major disaster declared to make the election. You will need to attach You can send us comments through by the President under section 401 of the Rob- Form 8997 annually until you dispose of the IRS.gov/FormComments. Or, you can write to ert T. Stafford Disaster Relief and Emergency QOF investment. See the Form 8997 instruc- the Internal Revenue Service, Tax Forms and Assistance Act (Stafford Act) in 2016, as well as tions for more information. Publications, 1111 Constitution Ave. NW, from Hurricane Harvey, Tropical Storm Harvey, QOF investment. If you held a qualified invest- IR-6526, Washington, DC 20224. Hurricanes Irma and Maria, the California wild- ment in a QOF at any time during the year, you Although we can’t respond individually to fires, the disasters described in the Taxpayer must file your return with Form 8997 attached. each comment received, we do appreciate your Certainty and Disaster Tax Relief Act of 2019, See the Form 8997 instructions. feedback and will consider your comments and and the disasters described in the Taxpayer Photographs of missing children. The Inter- suggestions as we revise our tax forms, instruc- Certainty and Disaster Tax Relief Act of 2020, nal Revenue Service is a proud partner with the tions, and publications. Do not send tax ques- may be claimed as a qualified disaster loss on National Center for Missing & Exploited tions, tax returns, or payments to the above ad- your Form 4684 for the year in which the loss Children® (NCMEC). Photographs of missing dress. was sustained. You can deduct qualified disas- children selected by the Center may appear in ter losses without itemizing other deductions on Getting answers to your tax questions. this publication on pages that would otherwise Schedule A (Form 1040). Moreover, your net If you have a tax question not answered by this be blank. You can help bring these children casualty loss from these qualified disasters publication or the How To Get Tax Help section home by looking at the photographs and calling doesn’t need to exceed 10% of your AGI to at the end of this publication, go to the IRS In- 1-800-THE-LOST (1-800-843-5678) if you rec- qualify for the deduction, but the $100 limit per teractive Tax Assistant page at IRS.gov/ ognize a child. casualty is increased to $500. Help/ITA where you can find topics by using the See Disaster Area Losses and Qualified dis- search feature or viewing the categories listed. aster loss, later, for more information on the Introduction Getting tax forms, instructions, and pub- special relief provided as part of the Disaster This publication explains the tax treatment of lications. Visit IRS.gov/Forms to download Tax Relief and Airport and Airway Extension Act casualties, thefts, and losses on deposits. A current and prior-year forms, instructions, and of 2017, the Tax Cuts and Jobs Act of 2017, the casualty occurs when your property is damaged publications. Bipartisan Budget Act of 2018, the Taxpayer as a result of a disaster such as a storm, fire, Certainty and Disaster Tax Relief Act of 2019, car accident, or similar event. A theft occurs Ordering tax forms, instructions, and and the Taxpayer Certainty and Disaster Tax when someone steals your property. A loss on publications. Go to IRS.gov/OrderForms to Relief Act of 2020. Also see IRS.gov/ deposits occurs when your financial institution order current forms, instructions, and publica- DisasterTaxRelief for more information about becomes insolvent or bankrupt. tions; call 800-829-3676 to order prior-year these and other disaster tax relief provisions. This publication discusses the following top- forms and instructions. The IRS will process See the 2019 Form 4684 and its in- ics. your order for forms and publications as soon TIP structions for the special rules regard- • Definitions of a casualty, theft, and loss on as possible. Do not resubmit requests you’ve ing your 2019 return. You may have to deposits. already sent us. You can get forms and publica- file an amended return on Form 1040-X to claim • How to figure the amount of your gain or tions faster online. these benefits on your 2019 return. Form loss. 1040-X is available at IRS.gov/Form1040X. The • How to treat insurance and other reim- Useful Items 2019 Form 4684 is available at IRS.gov/ bursements you receive. You may want to see: Form4684. See How to report the loss on Form • The deduction limits. 1040-X, later. • When and how to report a casualty or theft. Publication • The special rules for disaster area losses. Special rules for capital gains invested in 523 523 Selling Your Home qualified opportunity funds (QOFs). If you Forms to file. Generally, when you have a 525 525 Taxable and Nontaxable Income have a capital gain for 2020, you can invest that casualty or theft, you have to file Form 4684. You may also have to file one or more of the fol- gain into a qualified opportunity fund (QOF) and 536 536 Net Operating Losses (NOLs) for elect to defer part or all of the gain that you lowing forms. Individuals, Estates, and Trusts would otherwise include in income until Decem- • Schedule A (Form 1040).