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Hello JA Customer,
Casualty loss must result from a sudden, unexpected, and unusual event. This would definitely be considered such an event.
You must first limit your loss by $500, and then the total of your casualty losses must be reduced by 10% of your adjusted gross income. You also must itemize to take this deduction. I am giving you links to more information from the IRS. If deductible, you will report on Form 4684 and carry it to Schedule A.:
So as an example -- assume your total loss was $8,000. The first $500 is not included, leaving you with $7,500 you could claim. If your total AGI for the year is $40,000, then 10% of that amount (or $4,000) must also be deducted, leaving you with $3,500 you could claim as part of your itemized deductions.
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