Casualty & Theft Loss Deduction Calculator 2026 (Form 4684)
Calculate casualty and theft loss deductions for federally declared disasters. Step-by-step: lesser of basis or FMV decline, minus insurance, minus $100/event, minus 10% AGI floor. Business vs personal comparison.
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$
$
Usually original cost plus improvements $
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$0
Deductible Casualty Loss
$0
Unreimbursed Loss
$0
10% AGI Floor Reduction
$0
Estimated Tax Savings
Form 4684 β Casualty Loss Calculation
Casualty & Theft Loss Deduction β 2026 Rules
After TCJA, personal casualty loss deductions are limited to losses from federally declared disaster areas. Business casualties remain fully deductible. The calculation involves several reduction steps that often result in a smaller deduction than expected.
Personal Casualty Loss Formula (Form 4684 Section A)
Step 1: Loss Amount = Lesser of:
(a) Adjusted basis of property, OR
(b) FMV before loss β FMV after loss (decline in value)
Step 2: Net Loss = Loss Amount β Insurance/Reimbursement
Step 3: Less $100 per casualty event (per-event floor)
Step 4: Less 10% Γ AGI (10% AGI floor β applied to aggregate of all casualty losses)
Deductible Loss = Result of Step 4 (if positive)
Business casualty: same Step 1β2, NO $100 floor, NO 10% AGI floor.
(a) Adjusted basis of property, OR
(b) FMV before loss β FMV after loss (decline in value)
Step 2: Net Loss = Loss Amount β Insurance/Reimbursement
Step 3: Less $100 per casualty event (per-event floor)
Step 4: Less 10% Γ AGI (10% AGI floor β applied to aggregate of all casualty losses)
Deductible Loss = Result of Step 4 (if positive)
Business casualty: same Step 1β2, NO $100 floor, NO 10% AGI floor.
Example β Home Damaged by Hurricane (Federally Declared Disaster)
FMV before: $250,000 | FMV after: $50,000 | FMV decline: $200,000
Basis: $300,000 β lesser of $200,000 and $300,000 = $200,000 loss
Insurance recovery: $120,000 β unreimbursed: $80,000
Less $100 per event: $79,900
Less 10% AGI ($120,000): $12,000 β Deductible: $67,900
At 24% rate: Tax savings β $16,296
Basis: $300,000 β lesser of $200,000 and $300,000 = $200,000 loss
Insurance recovery: $120,000 β unreimbursed: $80,000
Less $100 per event: $79,900
Less 10% AGI ($120,000): $12,000 β Deductible: $67,900
At 24% rate: Tax savings β $16,296
Extended
Business vs Personal Comparison + 2024-2026 Disaster Zone Checker
Full Form 4684 worksheet, business vs personal tax impact, and overview of recent federally declared disaster areas
Business vs Personal Property β Side-by-Side Deduction Comparison
| Step | Personal Property | Business Property |
|---|
AGI Impact β How the 10% Floor Changes by Income Level
| AGI | 10% Floor | Deductible Loss (on $80K unreimbursed) | Tax Savings (24%) |
|---|
Recent Federally Declared Disasters β 2024-2026 Overview
| Disaster | Declaration Date | Affected Areas | Tax Year Applicable |
|---|---|---|---|
| Hurricane Helene | Sep 2024 | FL, GA, NC, SC, TN, VA | 2024 or 2025 election |
| Hurricane Milton | Oct 2024 | Florida (multiple counties) | 2024 or 2025 election |
| California Wildfires (LA) | Jan 2025 | Los Angeles County, CA | 2025 or 2024 election |
| Midwest Flooding | Various 2025 | Kentucky, Tennessee, Missouri | 2025 |
| Texas Storms | Various 2025 | Multiple TX counties | 2025 |
| Check fema.gov for full list. You may elect to deduct in the prior year (amend prior return) for faster refund. | |||
Prior-year election: For federally declared disasters, you may elect to deduct the loss on your prior year's return (by amending it) rather than the year of loss. This can generate a faster refund, especially if the prior year had higher income. The election must be made by the due date of the return for the year of the disaster.
Frequently Asked Questions
Can I deduct personal casualty losses in 2026?
After the Tax Cuts and Jobs Act (TCJA) of 2017, personal casualty and theft losses are only deductible if they occur in a federally declared disaster area. The TCJA restriction was set to expire after 2025, but it was extended by legislation. For 2026, personal casualty losses remain deductible only for presidentially declared disasters. Business casualty losses are not subject to this restriction and remain fully deductible. If your loss does not qualify as a federally declared disaster, you generally cannot deduct it as a personal loss (though you may claim it as a loss on theft of business property or use insurance recovery).
What is the formula for calculating a personal casualty loss deduction?
The deductible personal casualty loss is calculated in three steps: First, determine the loss amount = lesser of (a) adjusted basis of the property or (b) the decrease in fair market value (FMV before loss minus FMV after loss). Second, subtract any insurance or other reimbursement received. Third, from the net unreimbursed loss: subtract $100 per casualty event (the "per-event floor"), then subtract 10% of your Adjusted Gross Income (AGI). The remaining amount is your deductible loss. You must itemize deductions on Schedule A to claim this loss β it cannot be taken as a standard deduction.
How does business property casualty loss differ from personal?
Business casualty losses (property used in trade/business or for investment) are fully deductible without the $100/event floor or the 10% AGI floor that applies to personal losses. They are reported on Form 4684 (Section B) and flow to Form 4797 or Schedule E. There is also no requirement that the loss occur in a federally declared disaster area. Business property losses can create a Net Operating Loss (NOL) if they exceed other income, which can be carried forward. The loss is limited to the lesser of basis or FMV decline (same as personal), minus any insurance recovery.
What counts as a casualty event for tax purposes?
A casualty is sudden, unexpected, or unusual damage or destruction β such as fire, storm, flood, earthquake, hurricane, tornado, theft, vandalism, or car accident (if not caused by willful negligence). Progressively worsening events typically do NOT qualify β termite damage over years, rust, dry rot, erosion, or drought damage generally cannot be claimed as casualties because they are not sudden. For theft, you must have sufficient evidence of actual theft (police report, insurance claim) β misplaced or lost property does not qualify unless theft can be established.
How do I find out if my area had a federally declared disaster?
Federally declared disasters are issued by the President under the Stafford Act. The FEMA website (fema.gov/disaster) maintains a complete list of declared disasters with dates and affected counties. For IRS tax purposes, the IRS also issues guidance and special news releases for each major disaster, often providing additional relief such as extended filing deadlines and special election rules. For 2025-2026 major disasters: Hurricane Milton (Florida, Oct 2024), multiple California wildfires (Jan 2025), and flooding events may qualify depending on your county and timing of the loss.