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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Is damage from a car accident that wasnt covered by insurance

Resolved Question:

Is damage from a car accident that wasn't covered by insurance a casualty loss
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

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.:

 

http://www.irs.gov/newsroom/article/0,,id=212012,00.html

http://www.irs.gov/publications/p547/index.html

 

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.

 

If this was helpful please press the Accept button.

 

Thank you JA Customer

 

 

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