The Waterbury Democrat., 1943-02-13
YOUR INCOME
TAX
NO. 81
DEDUCTIONS FOR CASUALTY
LOSSES AND THEFTS

LOSSES AND THEFTS
Losses arising from fires, storms
shipwrecks, or other casualty, or
from theft, are allowable deductions
In computing net income for Fed
eral income tax purposes. Thus, II q
taxpayers home Is destroyed by fire
or damaged by food or storm, or
his automobile Is wrecked or II his
property Is stolen, he may claim q
deduction for the loss sustained and
not compensated for by insurance
or otherwise. The amount Of such
loss, If incurred In connection with
trade or business, is entered in
Schedule II to arrive at the net
profit Cor losS shown in item 9 OF
the return; other losses are entered
as item is Of Deductions In return.
Form 1040, and must be explained
In Schedule G Of the return form.
The intent Of the law regarding
deductions for casualties, generally
Is to allow for losses caused by nat
ural forces. Such losses may be
either Of @ personal or business
nature. To be an allowable deduc-
ton, the loss may not arise from
the willful act or negligence Of the
taxpayer. Damage sustained to ones
car by collision or accident, for
instance, Is a deductible loss. unless
the damage Is due to a willful act
or negligence on the part Of the tax.
payer. Faulty driving would not
be classified as negligence, but driv-
1,1n v,bila i,ntNviootad mould La ca
regarded.
Likewise, in the case of claims
for loss Of property by theft or burg
larry, 1t must be established that
the property actually was stolen,
and not merely mislaid or lost.
In the case of insured property,
the amount of recovery through In
Surance must be taken into account
In determining the amount of loss.
The amount Of loss allowable in
the case of property damaged or
destroyed is frequently difficult of
determination. A general rule is
that the loss Is measured by the
difference in the value of the prop
erty Immediately before and imne-
diately after the casualty. The loss
on wrecked car would be the diff
ference between its market value
just before the accident and the SAL
wage value after the accident. In
the case of trees, or ornamental
shrubbery. destroyed by a sleet or
snow storm, the measure Of the loss
Is the loss In the value of the prop
erty of which they were a part. that
is, the reduction in the value Of
the property arising from the cas-
ualty. This may or may not be
the same as the value of the partic-
ular trees or shrubs destroyed.
In determining the amount OF loss,
also, sentimental values are exclud.
ed. for the reason that such values
are not susceptible TO measurement.
Losses claimed must. In general, be
related 10 market value Of the prop
erty affected by the casualty. Losses
claimed for the destruction. damage,
or theft OF family portraits, heir.
looms. or keepsakes, must be based
upon loss OF intrinsic value apart
from the sentimental value.
A further rule regarding dedue-
lions for losses from casualties and
theftS Is that such losses are de-
ductlble only IN the year IN which
they are sustained. even though
.hey may not be discovered until 4
.sger year.
A dedu.tlon for loss from casualty
or theft may BE- allowed only 10 the
owner OF the property with respect
~ wkiah tie less y wankainnA