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Amended Federal Tax Return

Amended Tax Return FormHow To File 2012 Taxes Late Online Free2010 Amended Tax FormFederal Tax Forms And State FormsCan Tax Form 1040x Be Filed OnlineState Taxes FreeFile Taxes Free OnlineTax Forms For 2009Can You E File 1040xEtax ComHow To File A Amended Tax Return1040nr 2013Can I Still Do My 2012 TaxesTax Forms 2012 Federal 1040FreefilefillableformsFree Tax Filing H&r BlockFree Electronic Tax FilingHow To File Tax Extensions Online2010 Tax FilingFree Filing State TaxesFree Tax Filing For MilitaryForm 1040ezAmended Income Tax ReturnFree State Return Turbotax1040Handr BlockMilitary H & R BlockForm 1040xH&r Block 2012 TaxesLate TaxH&r Block Free 1040ezIrs Tax Forms 2012 1040aCan You Do State Taxes For FreeAmend Federal TaxesWho Has Free State Tax FilingPrintable 1040ez FormsTax Forms For StudentsIrs1040xFile 1040Filing Tax Return

Amended Federal Tax Return

Amended federal tax return Publication 600 - Introductory Material Table of Contents Introduction Introduction The Tax Relief and Health Care Act of 2006 extended the election to deduct state and local general sales taxes for 2006. Amended federal tax return The act was enacted after Schedule A (Form 1040), Itemized Deductions, and its instructions were printed. Amended federal tax return Because we were not able to include the instructions for figuring the deduction in the Schedule A instructions, we are providing this publication to help you figure this deduction. Amended federal tax return You can elect to deduct state and local general sales taxes instead of state and local income taxes as a deduction on Schedule A. Amended federal tax return You cannot deduct both. Amended federal tax return To figure your deduction, you can use either: Your actual expenses, or The optional sales tax tables plus the general sales taxes paid on certain specified items. Amended federal tax return Prev  Up  Next   Home   More Online Publications
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Understanding Your CP2030 Notice

We are proposing changes in income, credits, and deductions reported on your U.S. Corporation Income Tax Return. We compared your information with items reported to us by banks, businesses and other payers.


What you need to do

  • Compare the information in the two columns - "Shown on return" and "Reported to IRS by others". Did you receive the income? If you received the income, was it reported on your tax return? IRS employees search the tax return to locate all income, but they may be unable to determine the source if some items are combined.
  • If it wasn't reported on your tax return, you don't need to file an amended return to report the income. Simply check the box indicating that you agree with all changes, sign and date the CP 2030 response page and return it with your check or money order made payable to the United States Treasury.
  • If you agree with the increase, but you can't pay the entire balance due, you may be able to request a payment plan. If you didn't report the income for another reason, please explain.
  • If you don't agree with the increase, check the box indicating that you don’t agree with some or all of the changes on the CP 2030 response page and return it with a signed statement explaining each item of discrepancy. If applicable, attach copies of documents to support the entries on the original return.

You may want to…

  • Send us the name, address and taxpayer identification number of the other party that received the income if it isn't yours.
  • Notify the payers to correct their records to show the name and taxpayer identification number of the person or business who actually received the income, so future reports to us are accurate.

Answers to Common Questions

Is this a bill?

No. We're asking you to verify the income, credits, and deductions reported on your tax return because they're different from the information we received from other sources. The CP 2030 is only a proposal that offers you an opportunity to disagree, partially agree, or agree with the proposed changes. We haven't charged any additional tax at this time.

Why did it take you so long to contact us about this?

Tax years generally end on Dec. 31, but we don't receive information from banks, businesses, and other payers until much later. Once we receive all the tax returns and payer information, we compare the information you reported with the information third party payers provided to us. It can take 8 months or more to complete this review.

Should I call with my response or mail it in?

If you have a simple response, such as directing us to a specific line on your original return where you reported the income, you can call a Customer Service Representative and provide the information. A toll-free number is listed in the top right hand corner of the notice.

A written response may be required if the issue is more involved, especially if you disagree with some of the proposed changes. You may want to mail copies of payer information documents such as Form(s) 1099 or Schedule(s) K-1. Include any other letters or documents that support your position. You should submit a written statement to fully explain any unusual tax situations.

I need more time to find my records and go through them all. Will you allow me additional time to respond?

Your response is due by the date shown on the notice or we'll use the proposed changes to continue processing the case. If you need more time to research your records, you can call the toll-free number at the top of your notice to request a 30 day extension. We may also provide additional time to respond if you have unusual circumstances. Additional interest and any applicable penalties will accrue on the account during the period of the extension if the tax increase is correct.

Do I have to pay the interest? Can you remove it?

The law requires us to charge interest on any tax that isn't paid by the return due date (Internal Revenue Code Section 6601).

The law doesn't permit us to reduce or remove interest for reasonable cause. However, in limited circumstances we may waive penalties. If you believe you qualify for penalty removal, you should include related information in your response.

What should I do to avoid problems like this in the future?

Keep accurate payment information from banks and other payers to verify you've received all payment information for filing your return. Review the documents to be sure they show your most current address.

Take the following actions when filing your tax return to avoid similar issues in the future:

  • Report specific income type on the correct line on the Form 1120, U.S. Corporation Income Tax Return. For example, rental income should be claimed on Form 1120, line 6 (Gross Rents). For additional information, please see the reporting instructions for Form 1120.
  • If you report income on a line not traditionally reserved for that type of income, provide a statement indicating where the income was reported. For example, your business is related to investment activity and you're reporting all interest income (including amounts reported to the IRS on Form 1099-INT, Interest Income) with your gross receipts on Form 1120, line 1.
  • Always attach a statement identifying the source of the amount reported on Form 1120, line 10 (Other Income).
  • Provide an attached statement explaining your percentage of gross proceeds (ex; reported to us on Form 1099-MISC) that you would be liable to claim on your tax return.
  • Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received) for each of the other owners showing the amounts applicable to each.
Page Last Reviewed or Updated: 28-Feb-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amended Federal Tax Return

Amended federal tax return 25. Amended federal tax return   Nonbusiness Casualty and Theft Losses Table of Contents What's New Introduction Useful Items - You may want to see: CasualtyFamily pet. Amended federal tax return Progressive deterioration. Amended federal tax return Damage from corrosive drywall. Amended federal tax return Theft Loss on Deposits Proof of Loss Figuring a LossDecrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Single Casualty on Multiple Properties Deduction Limits$100 Rule 10% Rule When To Report Gains and LossesDisaster Area Loss How To Report Gains and Losses What's New New Section C of Form 4684 for Ponzi-type investment schemes. Amended federal tax return  Section C of Form 4684 is new for 2013. Amended federal tax return You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. Amended federal tax return Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Amended federal tax return You do not need to complete Appendix A. Amended federal tax return For details, see Losses from Ponzi-type investment schemes , in this chapter. Amended federal tax return Introduction This chapter explains the tax treatment of personal (not business or investment related) casualty losses, theft losses, and losses on deposits. Amended federal tax return The chapter also explains the following  topics. Amended federal tax return How to figure the amount of your loss. Amended federal tax return How to treat insurance and other reimbursements you receive. Amended federal tax return The deduction limits. Amended federal tax return When and how to report a casualty or theft. Amended federal tax return Forms to file. Amended federal tax return    When you have a casualty or theft, you have to file Form 4684. Amended federal tax return You will also have to file one or more of the following forms. Amended federal tax return Schedule A (Form 1040), Itemized Deductions Schedule D (Form 1040), Capital Gains and Losses Condemnations. Amended federal tax return   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Disposition of Assets. Amended federal tax return Workbook for casualties and thefts. Amended federal tax return    Publication 584 is available to help you make a list of your stolen or damaged personal-use property and figure your loss. Amended federal tax return It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. Amended federal tax return Business or investment-related losses. Amended federal tax return   For information on a casualty or theft loss of business or income-producing property, see Publication 547, Casualties, Disasters, and Thefts. Amended federal tax return Useful Items - You may want to see: Publication 544 Sales and Other Dispositions  of Assets 547 Casualties, Disasters, and   Thefts 584 Casualty, Disaster, and Theft   Loss Workbook (Personal-Use  Property) Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Amended federal tax return A sudden event is one that is swift, not gradual or progressive. Amended federal tax return An unexpected event is one that is ordinarily unanticipated and unintended. Amended federal tax return An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Amended federal tax return Deductible losses. Amended federal tax return   Deductible casualty losses can result from a number of different causes, including the following. Amended federal tax return Car accidents (but see Nondeductible losses , next, for exceptions). Amended federal tax return Earthquakes. Amended federal tax return Fires (but see Nondeductible losses , next, for exceptions). Amended federal tax return Floods. Amended federal tax return Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses in Publication 547. Amended federal tax return Mine cave-ins. Amended federal tax return Shipwrecks. Amended federal tax return Sonic booms. Amended federal tax return Storms, including hurricanes and tornadoes. Amended federal tax return Terrorist attacks. Amended federal tax return Vandalism. Amended federal tax return Volcanic eruptions. Amended federal tax return Nondeductible losses. Amended federal tax return   A casualty loss is not deductible if the damage or destruction is caused by the following. Amended federal tax return Accidentally breaking articles such as glassware or china under normal conditions. Amended federal tax return A family pet (explained below). Amended federal tax return A fire if you willfully set it or pay someone else to set it. Amended federal tax return A car accident if your willful negligence or willful act caused it. Amended federal tax return The same is true if the willful act or willful negligence of someone acting for you caused the accident. Amended federal tax return Progressive deterioration (explained later). Amended federal tax return Family pet. Amended federal tax return   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. Amended federal tax return Example. Amended federal tax return Your antique oriental rug was damaged by your new puppy before it was housebroken. Amended federal tax return Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. Amended federal tax return Progressive deterioration. Amended federal tax return    Loss of property due to progressive deterioration is not deductible as a casualty loss. Amended federal tax return This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Amended federal tax return The following are examples of damage due to progressive deterioration. Amended federal tax return The steady weakening of a building due to normal wind and weather conditions. Amended federal tax return The deterioration and damage to a water heater that bursts. Amended federal tax return However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. Amended federal tax return Most losses of property caused by droughts. Amended federal tax return To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. Amended federal tax return Termite or moth damage. Amended federal tax return The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. Amended federal tax return However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. Amended federal tax return Damage from corrosive drywall. Amended federal tax return   Under a special procedure, you may be able to claim a casualty loss deduction for amounts you paid to repair damage to your home and household appliances that resulted from corrosive drywall. Amended federal tax return For details, see Publication 547. Amended federal tax return Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. Amended federal tax return The taking of property must be illegal under the laws of the state where it occurred and it must have been done with criminal intent. Amended federal tax return You do not need to show a conviction for theft. Amended federal tax return Theft includes the taking of money or property by the following means. Amended federal tax return Blackmail. Amended federal tax return Burglary. Amended federal tax return Embezzlement. Amended federal tax return Extortion. Amended federal tax return Kidnapping for ransom. Amended federal tax return Larceny. Amended federal tax return Robbery. Amended federal tax return The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Amended federal tax return Decline in market value of stock. Amended federal tax return   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. Amended federal tax return However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. Amended federal tax return You report a capital loss on Schedule D (Form 1040). Amended federal tax return For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Amended federal tax return Mislaid or lost property. Amended federal tax return   The simple disappearance of money or property is not a theft. Amended federal tax return However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Amended federal tax return Sudden, unexpected, and unusual events are defined earlier. Amended federal tax return Example. Amended federal tax return A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Amended federal tax return The diamond falls from the ring and is never found. Amended federal tax return The loss of the diamond is a casualty. Amended federal tax return Losses from Ponzi-type investment schemes. Amended federal tax return   If you had a loss from a Ponzi-type investment scheme, see: Revenue Ruling 2009-9, 2009-14 I. Amended federal tax return R. Amended federal tax return B. Amended federal tax return 735 (available at www. Amended federal tax return irs. Amended federal tax return gov/irb/2009-14_IRB/ar07. Amended federal tax return html). Amended federal tax return Revenue Procedure 2009-20, 2009-14 I. Amended federal tax return R. Amended federal tax return B. Amended federal tax return 749 (available at www. Amended federal tax return irs. Amended federal tax return gov/irb/2009-14_IRB/ar11. Amended federal tax return html). Amended federal tax return Revenue Procedure 2011-58, 2011-50 I. Amended federal tax return R. Amended federal tax return B. Amended federal tax return 849 (available at www. Amended federal tax return irs. Amended federal tax return gov/irb/2011-50_IRB/ar11. Amended federal tax return html). Amended federal tax return If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. Amended federal tax return Skip lines 19 to 27. Amended federal tax return Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Amended federal tax return You do not need to complete Appendix A. Amended federal tax return For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. Amended federal tax return   If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. Amended federal tax return Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Amended federal tax return If you incurred this type of loss, you can choose one of the following ways to deduct the loss. Amended federal tax return As a casualty loss. Amended federal tax return As an ordinary loss. Amended federal tax return As a nonbusiness bad debt. Amended federal tax return Casualty loss or ordinary loss. Amended federal tax return   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. Amended federal tax return The choice is generally made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. Amended federal tax return If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. Amended federal tax return However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. Amended federal tax return Once you make this choice, you cannot change it without permission from the Internal Revenue Service. Amended federal tax return   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Amended federal tax return The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. Amended federal tax return Your loss is subject to the 2%-of-adjusted-gross-income limit. Amended federal tax return You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. Amended federal tax return Nonbusiness bad debt. Amended federal tax return   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. Amended federal tax return How to report. Amended federal tax return   The kind of deduction you choose for your loss on deposits determines how you report your loss. Amended federal tax return If you choose: Casualty loss — report it on Form 4684 first and then on Schedule A (Form 1040). Amended federal tax return Ordinary loss — report it on Schedule A (Form 1040) as a miscellaneous itemized deduction. Amended federal tax return Nonbusiness bad debt — report it on Form 8949 first and then on Schedule D (Form 1040). Amended federal tax return More information. Amended federal tax return   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684 or Deposit in Insolvent or Bankrupt Financial Institution in Publication 550. Amended federal tax return Proof of Loss To deduct a casualty or theft loss, you must be able to prove that you had a casualty or theft. Amended federal tax return You also must be able to support the amount you take as a deduction. Amended federal tax return Casualty loss proof. Amended federal tax return   For a casualty loss, your records should show all the following. Amended federal tax return The type of casualty (car accident, fire, storm, etc. Amended federal tax return ) and when it occurred. Amended federal tax return That the loss was a direct result of the casualty. Amended federal tax return That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. Amended federal tax return Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Amended federal tax return Theft loss proof. Amended federal tax return   For a theft loss, your records should show all the following. Amended federal tax return When you discovered that your property was missing. Amended federal tax return That your property was stolen. Amended federal tax return That you were the owner of the property. Amended federal tax return Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Amended federal tax return It is important that you have records that will prove your deduction. Amended federal tax return If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. Amended federal tax return Figuring a Loss Figure the amount of your loss using the following steps. Amended federal tax return Determine your adjusted basis in the property before the casualty or theft. Amended federal tax return Determine the decrease in fair market value of the property as a result of the casualty or theft. Amended federal tax return From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. Amended federal tax return For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. Amended federal tax return Gain from reimbursement. Amended federal tax return   If your reimbursement is more than your adjusted basis in the property, you have a gain. Amended federal tax return This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. Amended federal tax return If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. Amended federal tax return See Publication 547 for more information on how to treat a gain from a reimbursement for a casualty or theft. Amended federal tax return Leased property. Amended federal tax return   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. Amended federal tax return Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. Amended federal tax return The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. Amended federal tax return FMV of stolen property. Amended federal tax return   The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. Amended federal tax return Example. Amended federal tax return Several years ago, you purchased silver dollars at face value for $150. Amended federal tax return This is your adjusted basis in the property. Amended federal tax return Your silver dollars were stolen this year. Amended federal tax return The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. Amended federal tax return Your theft loss is $150. Amended federal tax return Recovered stolen property. Amended federal tax return   Recovered stolen property is your property that was stolen and later returned to you. Amended federal tax return If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. Amended federal tax return Use this amount to refigure your total loss for the year in which the loss was deducted. Amended federal tax return   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. Amended federal tax return But report the difference only up to the amount of the loss that reduced your tax. Amended federal tax return For more information on the amount to report, see Recoveries in chapter 12. Amended federal tax return Figuring Decrease in FMV— Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. Amended federal tax return However, other measures can also be used to establish certain decreases. Amended federal tax return Appraisal. Amended federal tax return   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. Amended federal tax return The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Amended federal tax return This information is needed to limit any deduction to the actual loss resulting from damage to the property. Amended federal tax return   Several factors are important in evaluating the accuracy of an appraisal, including the following. Amended federal tax return The appraiser's familiarity with your property before and after the casualty or theft. Amended federal tax return The appraiser's knowledge of sales of comparable property in the area. Amended federal tax return The appraiser's knowledge of conditions in the area of the casualty. Amended federal tax return The appraiser's method of appraisal. Amended federal tax return    You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. Amended federal tax return For more information on disasters, see Disaster Area Losses, in Pub. Amended federal tax return 547. Amended federal tax return Cost of cleaning up or making repairs. Amended federal tax return   The cost of repairing damaged property is not part of a casualty loss. Amended federal tax return Neither is the cost of cleaning up after a casualty. Amended federal tax return But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Amended federal tax return The repairs are actually made. Amended federal tax return The repairs are necessary to bring the property back to its condition before the casualty. Amended federal tax return The amount spent for repairs is not excessive. Amended federal tax return The repairs take care of the damage only. Amended federal tax return The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Amended federal tax return Landscaping. Amended federal tax return   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. Amended federal tax return You may be able to measure your loss by what you spend on the following. Amended federal tax return Removing destroyed or damaged trees and shrubs minus any salvage you receive. Amended federal tax return Pruning and other measures taken to preserve damaged trees and shrubs. Amended federal tax return Replanting necessary to restore the property to its approximate value before the casualty. Amended federal tax return Car value. Amended federal tax return    Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. Amended federal tax return You can use the book's retail values and modify them by such factors as mileage and the condition of your car to figure its value. Amended federal tax return The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. Amended federal tax return If your car is not listed in the books, determine its value from other sources. Amended federal tax return A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. Amended federal tax return Figuring Decrease in FMV— Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. Amended federal tax return Cost of protection. Amended federal tax return   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. Amended federal tax return The amount you spend on insurance or to board up your house against a storm is not part of your loss. Amended federal tax return   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. Amended federal tax return An example would be the cost of a dike to prevent flooding. Amended federal tax return Exception. Amended federal tax return   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments. Amended federal tax return See Disaster Area Losses in Publication 547. Amended federal tax return Incidental expenses. Amended federal tax return   Any incidental expenses you have due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. Amended federal tax return Replacement cost. Amended federal tax return   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. Amended federal tax return Sentimental value. Amended federal tax return   Do not consider sentimental value when determining your loss. Amended federal tax return If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. Amended federal tax return Decline in market value of property in or near casualty area. Amended federal tax return   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. Amended federal tax return You have a loss only for actual casualty damage to your property. Amended federal tax return However, if your home is in a federally declared disaster area, see Disaster Area Losses in Publication 547. Amended federal tax return Costs of photographs and appraisals. Amended federal tax return    Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. Amended federal tax return Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. Amended federal tax return    Appraisals are used to figure the decrease in FMV because of a casualty or theft. Amended federal tax return See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. Amended federal tax return   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. Amended federal tax return You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). Amended federal tax return For information about miscellaneous deductions, see chapter 28. Amended federal tax return Adjusted Basis Adjusted basis is your basis in the property (usually cost) increased or decreased by various events, such as improvements and casualty losses. Amended federal tax return For more information, see chapter 13. Amended federal tax return Insurance and Other Reimbursements If you receive an insurance payment or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Amended federal tax return You do not have a casualty or theft loss to the extent you are reimbursed. Amended federal tax return If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Amended federal tax return You must reduce your loss even if you do not receive payment until a later tax year. Amended federal tax return See Reimbursement Received After Deducting Loss , later. Amended federal tax return Failure to file a claim for reimbursement. Amended federal tax return   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Amended federal tax return Otherwise, you cannot deduct this loss as a casualty or theft loss. Amended federal tax return However, this rule does not apply to the portion of the loss not covered by insurance (for example, a deductible). Amended federal tax return Example. Amended federal tax return You have a car insurance policy with a $1,000 deductible. Amended federal tax return Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the deduction limits discussed later). Amended federal tax return This is true even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. Amended federal tax return Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. Amended federal tax return Other types of reimbursements are discussed next. Amended federal tax return Also see the Instructions for Form 4684. Amended federal tax return Employer's emergency disaster fund. Amended federal tax return   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. Amended federal tax return Take into consideration only the amount you used to replace your destroyed or damaged property. Amended federal tax return Example. Amended federal tax return Your home was extensively damaged by a tornado. Amended federal tax return Your loss after reimbursement from your insurance company was $10,000. Amended federal tax return Your employer set up a disaster relief fund for its employees. Amended federal tax return Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. Amended federal tax return You received $4,000 from the fund and spent the entire amount on repairs to your home. Amended federal tax return In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. Amended federal tax return Your casualty loss before applying the deduction limits discussed later is $6,000. Amended federal tax return Cash gifts. Amended federal tax return   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. Amended federal tax return This applies even if you use the money to pay for repairs to property damaged in the disaster. Amended federal tax return Example. Amended federal tax return Your home was damaged by a hurricane. Amended federal tax return Relatives and neighbors made cash gifts to you that were excludable from your income. Amended federal tax return You used part of the cash gifts to pay for repairs to your home. Amended federal tax return There were no limits or restrictions on how you could use the cash gifts. Amended federal tax return Because it was an excludable gift, the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. Amended federal tax return Insurance payments for living expenses. Amended federal tax return   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. Amended federal tax return You lose the use of your main home because of a casualty. Amended federal tax return Government authorities do not allow you access to your main home because of a casualty or threat of one. Amended federal tax return Inclusion in income. Amended federal tax return   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. Amended federal tax return Report this amount on Form 1040, line 21. Amended federal tax return However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. Amended federal tax return See Qualified disaster relief payments, under Disaster Area Losses in Publication 547. Amended federal tax return   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. Amended federal tax return Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. Amended federal tax return Generally, these expenses include the amounts you pay for the following. Amended federal tax return Rent for suitable housing. Amended federal tax return Transportation. Amended federal tax return Food. Amended federal tax return Utilities. Amended federal tax return Miscellaneous services. Amended federal tax return Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. Amended federal tax return Example. Amended federal tax return As a result of a fire, you vacated your apartment for a month and moved to a motel. Amended federal tax return You normally pay $525 a month for rent. Amended federal tax return None was charged for the month the apartment was vacated. Amended federal tax return Your motel rent for this month was $1,200. Amended federal tax return You normally pay $200 a month for food. Amended federal tax return Your food expenses for the month you lived in the motel were $400. Amended federal tax return You received $1,100 from your insurance company to cover your living expenses. Amended federal tax return You determine the payment you must include in income as follows. Amended federal tax return 1) Insurance payment for living expenses $1,100 2) Actual expenses during the month you are unable to use your home because of fire 1,600   3) Normal living expenses 725   4) Temporary increase in living  expenses: Subtract line 3 from line 2 875 5) Amount of payment includible  in income: Subtract line 4  from line 1 $ 225 Tax year of inclusion. Amended federal tax return   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. Amended federal tax return Example. Amended federal tax return Your main home was destroyed by a tornado in August 2011. Amended federal tax return You regained use of your home in November 2012. Amended federal tax return The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. Amended federal tax return You include this amount in income on your 2012 Form 1040. Amended federal tax return If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. Amended federal tax return Disaster relief. Amended federal tax return   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss unless they are replacements for lost or destroyed property. Amended federal tax return Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster are not taxable income to you. Amended federal tax return For more information, see Disaster Area Losses in Publication 547. Amended federal tax return Disaster unemployment assistance payments are unemployment benefits that are taxable. Amended federal tax return Generally, disaster relief grants and qualified disaster mitigation payments made under the Robert T. Amended federal tax return Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not includible in your income. Amended federal tax return See Disaster Area Losses in Publication 547. Amended federal tax return Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you receive your actual reimbursement. Amended federal tax return This section explains the adjustment you may have to make. Amended federal tax return Actual reimbursement less than expected. Amended federal tax return   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. Amended federal tax return Example. Amended federal tax return Your personal car had an FMV of $2,000 when it was destroyed in a collision with another car in 2012. Amended federal tax return The accident was due to the negligence of the other driver. Amended federal tax return At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. Amended federal tax return You did not have a deductible loss in 2012. Amended federal tax return In January 2013, the court awarded you a judgment of $2,000. Amended federal tax return However, in July it became apparent that you will be unable to collect any amount from the other driver. Amended federal tax return You can deduct the loss in 2013 subject to the limits discussed later. Amended federal tax return Actual reimbursement more than expected. Amended federal tax return   If you later receive more reimbursement than you expected after you claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Amended federal tax return However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. Amended federal tax return You do not refigure your tax for the year you claimed the deduction. Amended federal tax return For more information, see Recoveries in chapter 12. Amended federal tax return If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. Amended federal tax return If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. Amended federal tax return Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. Amended federal tax return See Figuring a Gain in Publication 547 for more information on how to treat a gain from the reimbursement of a casualty or theft. Amended federal tax return Actual reimbursement same as expected. Amended federal tax return   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. Amended federal tax return Example. Amended federal tax return In December 2013, you had a collision while driving your personal car. Amended federal tax return Repairs to the car cost $950. Amended federal tax return You had $100 deductible collision insurance. Amended federal tax return Your insurance company agreed to reimburse you for the rest of the damage. Amended federal tax return Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. Amended federal tax return Due to the $100 rule (discussed later under Deduction Limits ), you cannot deduct the $100 you paid as the deductible. Amended federal tax return When you receive the $850 from the insurance company in 2014, do not report it as income. Amended federal tax return Single Casualty on Multiple Properties Personal property. Amended federal tax return   Personal property is any property that is not real property. Amended federal tax return If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. Amended federal tax return Then combine these separate losses to figure the total loss from that casualty or theft. Amended federal tax return Example. Amended federal tax return A fire in your home destroyed an upholstered chair, an oriental rug, and an antique table. Amended federal tax return You did not have fire insurance to cover your loss. Amended federal tax return (This was the only casualty or theft you had during the year. Amended federal tax return ) You paid $750 for the chair and you established that it had an FMV of $500 just before the fire. Amended federal tax return The rug cost $3,000 and had an FMV of $2,500 just before the fire. Amended federal tax return You bought the table at an auction for $100 before discovering it was an antique. Amended federal tax return It had been appraised at $900 before the fire. Amended federal tax return You figure your loss on each of these items as follows:     Chair Rug Table 1) Basis (cost) $750 $3,000 $100 2) FMV before fire $500 $2,500 $900 3) FMV after fire –0– –0– –0– 4) Decrease in FMV $500 $2,500 $900 5) Loss (smaller of (1) or  (4)) $500 $2,500 $100           6) Total loss     $3,100 Real property. Amended federal tax return   In figuring a casualty loss on personal-use real property, treat the entire property (including any improvements, such as buildings, trees, and shrubs) as one item. Amended federal tax return Figure the loss using the smaller of the adjusted basis or the decrease in FMV of the entire property. Amended federal tax return Example. Amended federal tax return You bought your home a few years ago. Amended federal tax return You paid $160,000 ($20,000 for the land and $140,000 for the house). Amended federal tax return You also spent $2,000 for landscaping. Amended federal tax return This year a fire destroyed your home. Amended federal tax return The fire also damaged the shrubbery and trees in your yard. Amended federal tax return The fire was your only casualty or theft loss this year. Amended federal tax return Competent appraisers valued the property as a whole at $200,000 before the fire, but only $30,000 after the fire. Amended federal tax return (The loss to your household furnishings is not shown in this example. Amended federal tax return It would be figured separately on each item, as explained earlier under Personal property . Amended federal tax return ) Shortly after the fire, the insurance company paid you $155,000 for the loss. Amended federal tax return You figure your casualty loss as follows: 1) Adjusted basis of the entire property (land, building, and landscaping) $162,000 2) FMV of entire property before fire $200,000 3) FMV of entire property after fire 30,000 4) Decrease in FMV of entire  property $170,000 5) Loss (smaller of (1) or (4)) $162,000 6) Subtract insurance 155,000 7) Amount of loss after reimbursement $7,000 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. Amended federal tax return If the loss was to property for your personal use or your family's use, there are two limits on the amount you can deduct for your casualty or theft loss. Amended federal tax return You must reduce each casualty or theft loss by $100 ($100 rule). Amended federal tax return You must further reduce the total of all your casualty or theft losses by 10% of your adjusted gross income (10% rule). Amended federal tax return You make these reductions on Form 4684. Amended federal tax return These rules are explained next and Table 25-1 summarizes how to apply the $100 rule and the 10% rule in various situations. Amended federal tax return For more detailed explanations and examples, see Publication 547. Amended federal tax return Table 25-1. Amended federal tax return How To Apply the Deduction Limits for Personal-Use Property   $100 Rule 10% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. Amended federal tax return Apply this rule after you have figured the amount of your loss. Amended federal tax return You must reduce your total casualty or theft loss by 10% of your adjusted gross income. Amended federal tax return Apply this rule after you reduce each loss by $100 (the $100 rule). Amended federal tax return Single Event Apply this rule only once, even if many pieces of property are affected. Amended federal tax return Apply this rule only once, even if many pieces of property are affected. Amended federal tax return More Than One Event Apply to the loss from each event. Amended federal tax return Apply to the total of all your losses from all events. Amended federal tax return More Than One Person— With Loss From the Same Event (other than a married couple filing jointly) Apply separately to each person. Amended federal tax return Apply separately to each person. Amended federal tax return Married Couple—With Loss From the Same Event Filing Jointly Apply as if you were one person. Amended federal tax return Apply as if you were one person. Amended federal tax return Filing Separately Apply separately to each spouse. Amended federal tax return Apply separately to each spouse. Amended federal tax return More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. Amended federal tax return Apply separately to each owner of jointly owned property. Amended federal tax return Property used partly for business and partly for personal purposes. Amended federal tax return   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use part and for the business or income-producing part. Amended federal tax return You must figure each loss separately because the $100 rule and the 10% rule apply only to the loss on the personal-use part of the property. Amended federal tax return $100 Rule After you have figured your casualty or theft loss on personal-use property, you must reduce that loss by $100. Amended federal tax return This reduction applies to each total casualty or theft loss. Amended federal tax return It does not matter how many pieces of property are involved in an event. Amended federal tax return Only a single $100 reduction applies. Amended federal tax return Example. Amended federal tax return A hailstorm damages your home and your car. Amended federal tax return Determine the amount of loss, as discussed earlier, for each of these items. Amended federal tax return Since the losses are due to a single event, you combine the losses and reduce the combined amount by $100. Amended federal tax return Single event. Amended federal tax return   Generally, events closely related in origin cause a single casualty. Amended federal tax return It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. Amended federal tax return 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. Amended federal tax return Apply this rule after you reduce each loss by $100. Amended federal tax return For more information, see the Form 4684 instructions. Amended federal tax return If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. Amended federal tax return Example 1. Amended federal tax return In June, you discovered that your house had been burglarized. Amended federal tax return Your loss after insurance reimbursement was $2,000. Amended federal tax return Your adjusted gross income for the year you discovered the theft is $29,500. Amended federal tax return You first apply the $100 rule and then the 10% rule. Amended federal tax return Figure your theft loss deduction as follows. Amended federal tax return 1) Loss after insurance $2,000 2) Subtract $100 100 3) Loss after $100 rule $1,900 4) Subtract 10% × $29,500 AGI 2,950 5) Theft loss deduction –0– You do not have a theft loss deduction because your loss after you apply the $100 rule ($1,900) is less than 10% of your adjusted gross income ($2,950). Amended federal tax return Example 2. Amended federal tax return In March, you had a car accident that totally destroyed your car. Amended federal tax return You did not have collision insurance on your car, so you did not receive any insurance reimbursement. Amended federal tax return Your loss on the car was $1,800. Amended federal tax return In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items stored there. Amended federal tax return Your loss on the basement items after reimbursement was $2,100. Amended federal tax return Your adjusted gross income for the year that the accident and fire occurred is $25,000. Amended federal tax return You figure your casualty loss deduction as follows. Amended federal tax return       Base-     Car ment 1) Loss $1,800 $2,100 2) Subtract $100 per incident 100 100 3) Loss after $100 rule $1,700 $2,000 4) Total loss $3,700 5) Subtract 10% × $25,000 AGI 2,500 6) Casualty loss deduction $1,200 Gains and losses. Amended federal tax return   If you had both gains and losses from casualties or thefts to personal-use property, you must compare your total gains to your total losses. Amended federal tax return Do this after you have reduced each loss by any reimbursements and by $100, but before you have reduced the losses by 10% of your adjusted gross income. Amended federal tax return Casualty or theft gains do not include gains you choose to postpone. Amended federal tax return See Publication 547 for information on the postponement of gain. Amended federal tax return Losses more than gains. Amended federal tax return   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. Amended federal tax return The rest, if any, is your deductible loss from personal-use property. Amended federal tax return Gains more than losses. Amended federal tax return   If your recognized gains are more than your losses, subtract your losses from your gains. Amended federal tax return The difference is treated as capital gain and must be reported on Schedule D (Form 1040). Amended federal tax return The 10% rule does not apply to your gains. Amended federal tax return When To Report Gains and Losses Gains. Amended federal tax return   If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. Amended federal tax return You must include this gain in your income in the year you receive the reimbursement, unless you choose to postpone reporting the gain as explained in Publication 547. Amended federal tax return If you have a loss, see Table 25-2 . Amended federal tax return Table 25-2. Amended federal tax return When To Deduct a Loss IF you have a loss. Amended federal tax return . Amended federal tax return . Amended federal tax return THEN deduct it in the year. Amended federal tax return . Amended federal tax return . Amended federal tax return from a casualty, the loss occurred. Amended federal tax return in a federally declared disaster area, the disaster occurred or the year immediately before the disaster. Amended federal tax return from a theft, the theft was discovered. Amended federal tax return on a deposit treated as a:   • casualty or any ordinary loss, a reasonable estimate can be made. Amended federal tax return • bad debt, deposits are totally worthless. Amended federal tax return Losses. Amended federal tax return   Generally, you can deduct a casualty loss that is not reimbursable only in the tax year in which the casualty occurred. Amended federal tax return This is true even if you do not repair or replace the damaged property until a later year. Amended federal tax return   You can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. Amended federal tax return   If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. Amended federal tax return Loss on deposits. Amended federal tax return   If your loss is a loss on deposits in an insolvent or bankrupt financial institution, see Loss on Deposits , earlier. Amended federal tax return Disaster Area Loss You generally must deduct a casualty loss in the year it occurred. Amended federal tax return However, if you have a casualty loss from a federally declared disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct the loss on your tax return or amended return for either of the following years. Amended federal tax return The year the disaster occurred. Amended federal tax return The year immediately preceding the year the disaster occurred. Amended federal tax return Gains. Amended federal tax return    Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. Amended federal tax return For those special rules, see Publication 547. Amended federal tax return Postponed tax deadlines. Amended federal tax return   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. Amended federal tax return The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Amended federal tax return   If any tax deadline is postponed, the IRS will publicize the postponement in your area by publishing a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Amended federal tax return Go to www. Amended federal tax return irs. Amended federal tax return gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. Amended federal tax return Who is eligible. Amended federal tax return   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Amended federal tax return Any individual whose main home is located in a covered disaster area (defined next). Amended federal tax return Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Amended federal tax return Any individual who is a relief worker affiliated with a recognized government or philanthropic organization who is assisting in a covered disaster area. Amended federal tax return Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Amended federal tax return The main home or principal place of business does not have to be located in the covered disaster area. Amended federal tax return Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Amended federal tax return The spouse on a joint return with a taxpayer who is eligible for postponements. Amended federal tax return Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a postponed tax deadline are located in the covered disaster area. Amended federal tax return Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. Amended federal tax return Any other person determined by the IRS to be affected by a federally declared disaster. Amended federal tax return Covered disaster area. Amended federal tax return   This is an area of a federally declared disaster in which the IRS has decided to postpone tax deadlines for up to 1 year. Amended federal tax return Abatement of interest and penalties. Amended federal tax return   The IRS may abate the interest and penalties on underpaid income tax for the length of any postponement of tax deadlines. Amended federal tax return More information. Amended federal tax return   For more information, see Disaster Area Losses in Publication 547. Amended federal tax return How To Report Gains and Losses Use Form 4684 to report a gain or a deductible loss from a casualty or theft. Amended federal tax return If you have more than one casualty or theft, use a separate Form 4684 to determine your gain or loss for each event. Amended federal tax return Combine the gains and losses on one Form 4684. Amended federal tax return Follow the form instructions as to which lines to fill out. Amended federal tax return In addition, you must use the appropriate schedule to report a gain or loss. Amended federal tax return The schedule you use depends on whether you have a gain or loss. Amended federal tax return If you have a: Report it on: Gain Schedule D (Form 1040) Loss Schedule A (Form 1040) Adjustments to basis. Amended federal tax return   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive, and by any deductible loss. Amended federal tax return Amounts you spend to restore your property after a casualty increase your adjusted basis. Amended federal tax return See Adjusted Basis in chapter 13 for more information. Amended federal tax return Net operating loss (NOL). Amended federal tax return    If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have an NOL. Amended federal tax return You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you have already paid. Amended federal tax return Or, you can use it to lower your tax in a later year. Amended federal tax return You do not have to be in business to have an NOL from a casualty or theft loss. Amended federal tax return For more information, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Amended federal tax return Prev  Up  Next   Home   More Online Publications