Casualty-and-Theft Losses Under New Tax Law

A casualty loss occurs when there is property damage from a sudden, unanticipated event; not from gradual, progressive damage. Examples of events qualifying as a casualty include: acts of nature like hurricanes, tornadoes, floods, storms, and volcanic eruptions; shipwrecks; sonic booms; vandalism; fires; car accidents; theft; and terrorist attacks.

For years 2018 through 2025, the Tax Cuts and Jobs Act (TCJA) has suspended the itemized deduction for personal and theft losses. Prior to this change in law, personal casualty or theft losses were only deductible to the extent that they exceeded $100 per casualty of theft event. In addition, the aggregate net casualty and theft losses for the year were deductible by those who itemized their deductions but only to the extent that the loss exceeded 10 percent of an individual’s adjusted gross income (AGI).