'Loss and Theft' Deductions
By: AARP Tax-Aide |
Q: I had a flood in my home due to a water heater bursting. It caused a lot of damage in my home, but my insurance only covered some things and not others. Can I deduct the expense of the damage not covered by my insurance company in the "loss and theft" section on the tax forms?
A: Yes, you can if you itemize your deductions rather than take the standard deduction. Remember to attach Form 4684. When you complete that form, you will see that your deduction is the amount by which your net loss (total less insurance recoveries), less $100, exceeds 10 percent of your adjusted gross income.
These questions are actual inquiries submitted by taxpayers to our AARP Tax-Aide Program. The AARP Tax-Aide Program is a volunteer-run, free tax-preparation and assistance program offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.
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