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State Tax Efile

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State Tax Efile

State tax efile Publication 1544 - Introductory Material Table of Contents What's New Introduction What's New Future developments. State tax efile  For the latest information about developments related to Publication 1544, such as legislation enacted after it was published, go to www. State tax efile irs. State tax efile gov/pub1544. State tax efile Amending a report. State tax efile  You can amend a prior report by checking box 1a at the top of Form 8300. State tax efile See Amending a report, later. State tax efile Introduction If, in a 12-month period, you receive more than $10,000 in cash from one buyer as a result of a transaction in your trade or business, you must report it to the Internal Revenue Service (IRS) and the Financial Crimes Enforcement Network (FinCEN) on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. State tax efile This publication explains why, when, and where to report these cash payments. State tax efile It also discusses the substantial penalties for not reporting them. State tax efile Some organizations do not have to file Form 8300, including financial institutions who must file FinCEN Form 104 (formerly Form 4789), Currency Transaction Report, and casinos who must file FinCEN Form 103 (formerly Form 8362), Currency Transaction Report by Casinos. State tax efile They are not discussed in this publication. State tax efile This publication explains key issues and terms related to Form 8300. State tax efile You should also read the instructions attached to the form. State tax efile They explain what to enter on each line. State tax efile Prev  Up  Next   Home   More Online Publications
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State tax efile 11. State tax efile   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. State tax efile Nondeductible losses. State tax efile Family pet. State tax efile Progressive deterioration. State tax efile Decline in market value of stock. State tax efile Mislaid or lost property. State tax efile Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. State tax efile Related persons. State tax efile Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. State tax efile Covered disaster area. State tax efile Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. State tax efile A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. State tax efile A theft occurs when property is stolen. State tax efile A condemnation occurs when private property is legally taken for public use without the owner's consent. State tax efile A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. State tax efile You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. State tax efile An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. State tax efile If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. State tax efile For more information, see Postponing Gain , later. State tax efile Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. State tax efile Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. State tax efile If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. State tax efile Casualty. State tax efile   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. State tax efile A sudden event is one that is swift, not gradual or progressive. State tax efile An unexpected event is one that is ordinarily unanticipated and unintended. State tax efile 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. State tax efile Deductible losses. State tax efile   Deductible casualty losses can result from a number of different causes, including the following. State tax efile Airplane crashes. State tax efile Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. State tax efile Earthquakes. State tax efile Fires (but see Nondeductible losses next for exceptions). State tax efile Floods. State tax efile Freezing. State tax efile 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. State tax efile Lightning. State tax efile Storms, including hurricanes and tornadoes. State tax efile Terrorist attacks. State tax efile Vandalism. State tax efile Volcanic eruptions. State tax efile Nondeductible losses. State tax efile   A casualty loss is not deductible if the damage or destruction is caused by the following. State tax efile Accidentally breaking articles such as glassware or china under normal conditions. State tax efile A family pet (explained below). State tax efile A fire if you willfully set it, or pay someone else to set it. State tax efile A car, truck, or farm equipment accident if your willful negligence or willful act caused it. State tax efile The same is true if the willful act or willful negligence of someone acting for you caused the accident. State tax efile Progressive deterioration (explained below). State tax efile Family pet. State tax efile   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. State tax efile Example. State tax efile You keep your horse in your yard. State tax efile The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. State tax efile Some of the trees were completely girdled and died. State tax efile Because the damage was not unexpected or unusual, the loss is not deductible. State tax efile Progressive deterioration. State tax efile   Loss of property due to progressive deterioration is not deductible as a casualty loss. State tax efile This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. State tax efile Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. State tax efile However, weather-related conditions or disease may cause another type of involuntary conversion. State tax efile See Other Involuntary Conversions , later. State tax efile Theft. State tax efile   A theft is the taking and removing of money or property with the intent to deprive the owner of it. State tax efile The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. State tax efile You do not need to show a conviction for theft. State tax efile   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. State tax efile The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. State tax efile Decline in market value of stock. State tax efile   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. State tax efile 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. State tax efile You report a capital loss on Schedule D (Form 1040). State tax efile For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. State tax efile Mislaid or lost property. State tax efile   The simple disappearance of money or property is not a theft. State tax efile 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. State tax efile Example. State tax efile A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. State tax efile The diamond falls from the ring and is never found. State tax efile The loss of the diamond is a casualty. State tax efile Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. State tax efile The following is a discussion of some losses you can deduct and some you cannot deduct. State tax efile Livestock or produce bought for resale. State tax efile   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. State tax efile If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. State tax efile You cannot take a separate deduction. State tax efile Livestock, plants, produce, and crops raised for sale. State tax efile   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. State tax efile You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. State tax efile   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. State tax efile You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. State tax efile The uniform capitalization rules are discussed in chapter 6. State tax efile   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. State tax efile You get the deduction by omitting the item from your inventory at the close of your tax year. State tax efile You cannot take a separate casualty or theft deduction. State tax efile Income loss. State tax efile   A loss of future income is not deductible. State tax efile Example. State tax efile A severe flood destroyed your crops. State tax efile Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . State tax efile You estimate that the crop loss will reduce your farm income by $25,000. State tax efile This loss of future income is also not deductible. State tax efile Loss of timber. State tax efile   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. State tax efile If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. State tax efile See Postponing Gain , later. State tax efile Property used in farming. State tax efile   Casualty and theft losses of property used in your farm business usually result in deductible losses. State tax efile If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. State tax efile See How To Figure a Loss , later. State tax efile Raised draft, breeding, dairy, or sporting animals. State tax efile   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. State tax efile However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. State tax efile You use inventories to determine your income and you included the animals in your inventory. State tax efile You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. State tax efile When you include livestock in inventory, its last inventory value is its basis. State tax efile When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. State tax efile You cannot take a separate deduction. State tax efile How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. State tax efile Farm property. State tax efile   Farm property is the property you use in your farming business. State tax efile If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. State tax efile   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. State tax efile However, the deduction limits, discussed later, do not apply to farm property. State tax efile Personal-use property. State tax efile   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. State tax efile The following items are examples of personal-use property: Your main home. State tax efile Furniture and electronics used in your main home and not used in a home office or for business purposes. State tax efile Clothing and jewelry. State tax efile An automobile used for nonbusiness purposes. State tax efile You figure the casualty or theft loss on this property by taking the following steps. State tax efile Determine your adjusted basis in the property before the casualty or theft. State tax efile Determine the decrease in fair market value of the property as a result of the casualty or theft. State tax efile From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. State tax efile You must apply the deduction limits, discussed later, to determine your deductible loss. State tax efile    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. State tax efile It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. State tax efile Adjusted basis. State tax efile   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. State tax efile For more information about adjusted basis, see chapter 6. State tax efile Decrease in fair market value (FMV). State tax efile   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. State tax efile FMV is defined in chapter 10 under Payments Received or Considered Received . State tax efile Appraisal. State tax efile   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. State tax efile But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. State tax efile   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. State tax efile The appraiser must recognize the effects of any general market decline that may occur along with the casualty. State tax efile This information is needed to limit any deduction to the actual loss resulting from damage to the property. State tax efile Cost of cleaning up or making repairs. State tax efile   The cost of cleaning up after a casualty is not part of a casualty loss. State tax efile Neither is the cost of repairing damaged property after a casualty. State tax efile 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. State tax efile The repairs are actually made. State tax efile The repairs are necessary to bring the property back to its condition before the casualty. State tax efile The amount spent for repairs is not excessive. State tax efile The repairs fix the damage only. State tax efile The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. State tax efile Related expenses. State tax efile   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. State tax efile However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. State tax efile Separate computations for more than one item of property. State tax efile   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. State tax efile Then combine the losses to determine your total loss. State tax efile    There is an exception to this rule for personal-use real property. State tax efile See Exception for personal-use real property, later. State tax efile Example. State tax efile A fire on your farm damaged a tractor and the barn in which it was stored. State tax efile The tractor had an adjusted basis of $3,300. State tax efile Its FMV was $28,000 just before the fire and $10,000 immediately afterward. State tax efile The barn had an adjusted basis of $28,000. State tax efile Its FMV was $55,000 just before the fire and $25,000 immediately afterward. State tax efile You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. State tax efile Figure your deductible casualty loss separately for the two items of property. State tax efile     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. State tax efile   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. State tax efile Figure the loss using the smaller of the following. State tax efile The decrease in FMV of the entire property. State tax efile The adjusted basis of the entire property. State tax efile Example. State tax efile You bought a farm in 1990 for $160,000. State tax efile The adjusted basis of the residential part is now $128,000. State tax efile In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. State tax efile The adjusted basis of the residential part includes the $7,500. State tax efile The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. State tax efile The trees were not covered by insurance. State tax efile 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. State tax efile   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. State tax efile You do not have a casualty or theft loss to the extent you are reimbursed. State tax efile   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. State tax efile You must reduce your loss even if you do not receive payment until a later tax year. State tax efile    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. State tax efile You may have to include a portion of these payments in your income. State tax efile See Insurance payments for living expenses in Publication 547 for details. State tax efile Disaster relief. State tax efile   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. State tax efile Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. State tax efile   Generally, disaster relief grants received under the Robert T. State tax efile Stafford Disaster Relief and Emergency Assistance Act are not included in your income. State tax efile See Federal disaster relief grants , later, under Disaster Area Losses . State tax efile   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. State tax efile See Qualified disaster relief payments , later, under Disaster Area Losses . State tax efile Reimbursement received after deducting loss. State tax efile   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. State tax efile Actual reimbursement less than expected. State tax efile   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. State tax efile Actual reimbursement more than expected. State tax efile   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. State tax efile However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. State tax efile Do not refigure your tax for the year you claimed the deduction. State tax efile See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. State tax efile 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. State tax efile See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. State tax efile Actual reimbursement same as expected. State tax efile   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. State tax efile Lump-sum reimbursement. State tax efile   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. State tax efile Figure the gain or loss separately for each asset that has a separate basis. State tax efile Adjustments to basis. State tax efile   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. State tax efile The result is your adjusted basis in the property. State tax efile Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. State tax efile See Adjusted Basis in chapter 6 for more information. State tax efile Example. State tax efile You built a new silo for $25,000. State tax efile This is the basis in your silo because that is the total cost you incurred to build it. State tax efile During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. State tax efile In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. State tax efile Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). State tax efile Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). State tax efile There are two limits on the deduction for casualty or theft loss of personal-use property. State tax efile You figure these limits on Form 4684. State tax efile $100 rule. State tax efile   You must reduce each casualty or theft loss on personal-use property by $100. State tax efile This rule applies after you have subtracted any reimbursement. State tax efile 10% rule. State tax efile   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. State tax efile Apply this rule after you reduce each loss by $100. State tax efile Adjusted gross income is on line 38 of Form 1040. State tax efile Example. State tax efile In June, you discovered that your house had been burglarized. State tax efile Your loss after insurance reimbursement was $2,000. State tax efile Your adjusted gross income for the year you discovered the burglary is $57,000. State tax efile Figure your theft loss deduction as follows: 1. State tax efile Loss after insurance $2,000 2. State tax efile Subtract $100 100 3. State tax efile Loss after $100 rule $1,900 4. State tax efile Subtract 10% (. State tax efile 10) × $57,000 AGI $5,700 5. State tax efile Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). State tax efile    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. State tax efile See 10% Rule in Publication 547. State tax efile When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. State tax efile You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. State tax efile However, losses in federally declared disaster areas are subject to different rules. State tax efile See Disaster Area Losses , later, for an exception. State tax efile 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. State tax efile Leased property. State tax efile   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. State tax efile This is true even if the loss occurred or the liability was paid in a different year. State tax efile You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. State tax efile Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. State tax efile Example. State tax efile Robert leased a tractor from First Implement, Inc. State tax efile , for use in his farm business. State tax efile The tractor was destroyed by a tornado in June 2012. State tax efile The loss was not insured. State tax efile First Implement billed Robert for the fair market value of the tractor on the date of the loss. State tax efile Robert disagreed with the bill and refused to pay it. State tax efile First Implement later filed suit in court against Robert. State tax efile In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. State tax efile Robert paid $20,000 in June 2013. State tax efile He can claim the $20,000 as a loss on his 2013 tax return. State tax efile Net operating loss (NOL). State tax efile   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. State tax efile An NOL can be carried back or carried forward and deducted from income in other years. State tax efile See Publication 536 for more information on NOLs. State tax efile Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. State tax efile You must have records to support the amount you claim for the loss. State tax efile Casualty loss proof. State tax efile   For a casualty loss, your records should show all the following information. State tax efile The type of casualty (car accident, fire, storm, etc. State tax efile ) and when it occurred. State tax efile That the loss was a direct result of the casualty. State tax efile 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. State tax efile Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. State tax efile Theft loss proof. State tax efile   For a theft loss, your records should show all the following information. State tax efile When you discovered your property was missing. State tax efile That your property was stolen. State tax efile That you were the owner of the property. State tax efile Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. State tax efile Figuring a Gain A casualty or theft may result in a taxable gain. State tax efile If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. State tax efile You generally report your gain as income in the year you receive the reimbursement. State tax efile However, depending on the type of property you receive, you may not have to report your gain. State tax efile See Postponing Gain , later. State tax efile Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. State tax efile Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. State tax efile Amount you receive. State tax efile   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. State tax efile It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. State tax efile Example. State tax efile A tornado severely damaged your barn. State tax efile The adjusted basis of the barn was $25,000. State tax efile Your insurance company reimbursed you $40,000 for the damaged barn. State tax efile However, you had legal expenses of $2,000 to collect that insurance. State tax efile Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. State tax efile 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. State tax efile Some of these are discussed in the following paragraphs. State tax efile Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. State tax efile You report the gain or deduct the loss on your tax return for the year you realize it. State tax efile However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. State tax efile See Postponing Gain , later. State tax efile Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. State tax efile The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. State tax efile The owner receives a condemnation award (money or property) in exchange for the property taken. State tax efile A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. State tax efile Threat of condemnation. State tax efile   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. State tax efile Main home condemned. State tax efile   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. State tax efile For information on this exclusion, see Publication 523. State tax efile If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. State tax efile See Postponing Gain , later. State tax efile (You cannot deduct a loss from the condemnation of your main home. State tax efile ) More information. State tax efile   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. State tax efile Also see Postponing Gain , later, to find out if you can postpone reporting the gain. State tax efile Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. State tax efile Livestock Losses Diseased livestock. State tax efile   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. State tax efile If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . State tax efile Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. State tax efile If you replace the livestock, you may be able to postpone reporting the gain. State tax efile See Postponing Gain below. State tax efile Reporting dispositions of diseased livestock. State tax efile   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. State tax efile You must also include other information on this statement. State tax efile See How To Postpone Gain , later, under Postponing Gain . State tax efile Weather-related sales of livestock. State tax efile   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. State tax efile Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. State tax efile Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. State tax efile If you replace the livestock, you may be able to postpone reporting the gain. State tax efile See Postponing Gain below. State tax efile Example. State tax efile It is your usual business practice to sell five of your dairy animals during the year. State tax efile This year you sold 20 dairy animals because of drought. State tax efile The sale of 15 animals is treated as an involuntary conversion. State tax efile    If you do not replace the livestock, you may be able to report the gain in the following year's income. State tax efile This rule also applies to other livestock (including poultry). State tax efile See Sales Caused by Weather-Related Conditions in chapter 3. State tax efile Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. State tax efile Treat the loss as a loss from an involuntary conversion. State tax efile The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. State tax efile You deduct the loss on the return for the year the seedlings died. State tax efile Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. State tax efile Your basis in the new property is generally the same as your adjusted basis in the property it replaces. State tax efile You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. State tax efile However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. State tax efile If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. State tax efile To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. State tax efile If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. State tax efile Example 1. State tax efile In 1985, you constructed a barn to store farm equipment at a cost of $20,000. State tax efile In 1987, you added a silo to the barn at a cost of $15,000 to store grain. State tax efile In May of this year, the property was worth $100,000. State tax efile In June the barn and silo were destroyed by a tornado. State tax efile At the time of the tornado, you had an adjusted basis of $0 in the property. State tax efile You received $85,000 from the insurance company. State tax efile You had a gain of $85,000 ($85,000 – $0). State tax efile You spent $80,000 to rebuild the barn and silo. State tax efile Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. State tax efile Example 2. State tax efile In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. State tax efile You made no further improvements or additions to it. State tax efile When a storm destroyed the cabin this January, the cabin was worth $250,000. State tax efile You received $146,000 from the insurance company in March. State tax efile You had a gain of $128,000 ($146,000 − $18,000). State tax efile You spent $144,000 to rebuild the cabin. State tax efile Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. State tax efile Buying replacement property from a related person. State tax efile   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). State tax efile This rule applies to the following taxpayers. State tax efile C corporations. State tax efile Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. State tax efile Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. State tax efile For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. State tax efile If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. State tax efile If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. State tax efile Exception. State tax efile   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. State tax efile Related persons. State tax efile   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. State tax efile For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. State tax efile Death of a taxpayer. State tax efile   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. State tax efile The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. State tax efile Replacement Property You must buy replacement property for the specific purpose of replacing your property. State tax efile Your replacement property must be similar or related in service or use to the property it replaces. State tax efile You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. State tax efile If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. State tax efile Property you acquire by gift or inheritance does not qualify as replacement property. State tax efile Owner-user. State tax efile   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. State tax efile Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. State tax efile A grinding mill that replaces a tractor does not qualify. State tax efile Neither does a breeding or draft animal that replaces a dairy cow. State tax efile Soil or other environmental contamination. State tax efile   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. State tax efile Weather-related conditions. State tax efile   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. State tax efile Example. State tax efile Each year you normally sell 25 cows from your beef herd. State tax efile However, this year you had to sell 50 cows. State tax efile This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. State tax efile Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. State tax efile Standing crop destroyed by casualty. State tax efile   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. State tax efile The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). State tax efile In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. State tax efile Timber loss. State tax efile   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. State tax efile If you bought the standing timber within the replacement period, you can postpone reporting the gain. State tax efile Business or income-producing property located in a federally declared disaster area. State tax efile   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. State tax efile For more information, see Disaster Area Losses in Publication 547. State tax efile Substituting replacement property. State tax efile   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. State tax efile This is true even if you acquire the other property within the replacement period. State tax efile However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. State tax efile Basis of replacement property. State tax efile   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. State tax efile In this way, tax on the gain is postponed until you dispose of the replacement property. State tax efile Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. State tax efile This is the replacement period. State tax efile The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. State tax efile The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. State tax efile Example. State tax efile You are a calendar year taxpayer. State tax efile While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. State tax efile You discovered the theft when you returned to your farm on November 11, 2012. State tax efile Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. State tax efile You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. State tax efile Main home in disaster area. State tax efile   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. State tax efile See Disaster Area Losses , later. State tax efile Property in the Midwestern disaster areas. State tax efile   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. State tax efile This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. State tax efile Property in the Kansas disaster area. State tax efile   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. State tax efile This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. State tax efile Property in the Hurricane Katrina disaster area. State tax efile   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. State tax efile This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. State tax efile Weather-related sales of livestock in an area eligible for federal assistance. State tax efile   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. State tax efile The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. State tax efile   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. State tax efile R. State tax efile B. State tax efile 529, available at  www. State tax efile irs. State tax efile gov/irb/2006-39_IRB/ar11. State tax efile html. State tax efile For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. State tax efile gov. State tax efile Condemnation. State tax efile   The replacement period for a condemnation begins on the earlier of the following dates. State tax efile The date on which you disposed of the condemned property. State tax efile The date on which the threat of condemnation began. State tax efile The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. State tax efile But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. State tax efile Business or investment real property. State tax efile   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. State tax efile Extension. State tax efile   You can apply for an extension of the replacement period. State tax efile Send your written application to the Internal Revenue Service Center where you file your tax return. State tax efile See your tax return instructions for the address. State tax efile Include all the details about your need for an extension. State tax efile Make your application before the end of the replacement period. State tax efile However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. State tax efile You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. State tax efile How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. State tax efile You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. State tax efile Required statement. State tax efile   You should attach a statement to your return for the year you have the gain. State tax efile This statement should include all the following information. State tax efile The date and details of the casualty, theft, or other involuntary conversion. State tax efile The insurance or other reimbursement you received. State tax efile How you figured the gain. State tax efile Replacement property acquired before return filed. State tax efile   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. State tax efile The replacement property. State tax efile The postponed gain. State tax efile The basis adjustment that reflects the postponed gain. State tax efile Any gain you are reporting as income. State tax efile Replacement property acquired after return filed. State tax efile   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. State tax efile   You should then attach another statement to your return for the year in which you buy the replacement property. State tax efile This statement should contain detailed information on the replacement property. State tax efile If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. State tax efile Include in the statement detailed information on the replacement property bought in that year. State tax efile Reporting weather-related sales of livestock. State tax efile   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. State tax efile Evidence of the weather-related conditions that forced the sale or exchange of the livestock. State tax efile The gain realized on the sale or exchange. State tax efile The number and kind of livestock sold or exchanged. State tax efile The number of livestock of each kind you would have sold or exchanged under your usual business practice. State tax efile   Show all the following information and the preceding information on the return for the year in which you replace the livestock. State tax efile The dates you bought the replacement property. State tax efile The cost of the replacement property. State tax efile Description of the replacement property (for example, the number and kind of the replacement livestock). State tax efile Amended return. State tax efile   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. State tax efile You do not acquire replacement property within the replacement period, plus extensions. State tax efile On this amended return, you must report the gain and pay any additional tax due. State tax efile You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. State tax efile On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. State tax efile Disaster Area Losses Special rules apply to federally declared disaster area losses. State tax efile A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. State tax efile Stafford Disaster Relief and Emergency Assistance Act. State tax efile It includes a major disaster or emergency declaration under the act. State tax efile A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. State tax efile fema. State tax efile gov. State tax efile This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. State tax efile For other special rules, see Disaster Area Losses in Publication 547. State tax efile When to deduct the loss. State tax efile   You generally must deduct a casualty loss in the year it occurred. State tax efile However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. State tax efile If you make this choice, the loss is treated as having occurred in the preceding year. State tax efile    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. State tax efile   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. State tax efile The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. State tax efile The due date (with extensions) for the return for the preceding tax year. State tax efile Federal disaster relief grants. State tax efile   Do not include post-disaster relief grants received under the Robert T. State tax efile Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. State tax efile Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. State tax efile If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. State tax efile Unemployment assistance payments under the Act are taxable unemployment compensation. State tax efile Qualified disaster relief payments. State tax efile   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. State tax efile These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). State tax efile No withholding applies to these payments. State tax efile   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. State tax efile Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. State tax efile Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. State tax efile (A personal residence can be a rented residence or one you own. State tax efile ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. State tax efile   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. State tax efile    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. State tax efile Qualified disaster mitigation payments. State tax efile   Qualified disaster mitigation payments made under the Robert T. State tax efile Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. State tax efile These are payments you, as a property owner, receive to reduce the risk of future damage to your property. State tax efile You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. State tax efile Sale of property under hazard mitigation program. State tax efile   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. State tax efile You report the gain or deduct the loss on your tax return for the year you realize it. State tax efile (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. State tax efile ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. State tax efile See Postponing Gain , earlier, for the rules that apply. State tax efile Other federal assistance programs. State tax efile    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. State tax efile Postponed tax deadlines. State tax efile   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. State tax efile The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. State tax efile   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). State tax efile Go to http://www. State tax efile irs. State tax efile gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. State tax efile Who is eligible. State tax efile   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. State tax efile Any individual whose main home is located in a covered disaster area (defined next). State tax efile Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. State tax efile Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. State tax efile 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. State tax efile The main home or principal place of business does not have to be located in the covered disaster area. State tax efile 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. State tax efile The spouse on a joint return with a taxpayer who is eligible for postponements. State tax efile Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. State tax efile Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. State tax efile Any other person determined by the IRS to be affected by a federally declared disaster. State tax efile Covered disaster area. State tax efile   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. State tax efile Abatement of interest and penalties. State tax efile   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. State tax efile Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. State tax efile Form 4684. State tax efile   Use this form to report your gains and losses from casualties and thefts. State tax efile Form 4797. State tax efile   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. State tax efile Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. State tax efile Form 8949. State tax efile   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. State tax efile Schedule A (Form 1040). State tax efile   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. State tax efile Schedule D (Form 1040). State tax efile   Use this form to carry over the following gains. State tax efile Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. State tax efile Net gain shown on Form 4684 from the casualty or theft of personal-use property. State tax efile    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. State tax efile Schedule F (Form 1040). State tax efile   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. State tax efile Prev  Up  Next   Home   More Online Publications