Application of The Casualty Loss Deduction
According to §62(a)(3), only losses from Sale or Exchange are above the line. Other losses are usually “regular itemized deductions” (below the line) if included in §67(b)’s exceptions.
165(a):
1. Loss must be “sustained” (a. Depends on taxpayer’s reasonable expectation of recovery from the wrongdoer, b. should be resolved independently of any insurance consequences involved, and (2) taxpayer must not have been “compensated” for the loss
165(c):
If a realized loss is not described below, an individual taxpayer cannot deduct the loss.
1. losses incurred in a trade or business
2. losses incurred in profit-motivated transactions
3. casualty and theft losses w/ respect to personal-use property.
Read more about this topic: Casualty Loss
Famous quotes containing the words application of the, application of, application and/or loss:
“Most people, no doubt, when they espouse human rights, make their own mental reservations about the proper application of the word “human.””
—Suzanne Lafollette (1893–1983)
“It is known that Whistler when asked how long it took him to paint one of his “nocturnes” answered: “All of my life.” With the same rigor he could have said that all of the centuries that preceded the moment when he painted were necessary. From that correct application of the law of causality it follows that the slightest event presupposes the inconceivable universe and, conversely, that the universe needs even the slightest of events.”
—Jorge Luis Borges (1899–1986)
“The application requisite to the duties of the office I hold [governor of Virginia] is so excessive, and the execution of them after all so imperfect, that I have determined to retire from it at the close of the present campaign.”
—Thomas Jefferson (1743–1826)
“Eventually we will learn that the loss of indivisible love is another of our necessary losses, that loving extends beyond the mother-child pair, that most of the love we receive in this world is love we will have to share—and that sharing begins at home, with our sibling rivals.”
—Judith Viorst (20th century)