If you are a victim of theft or if an accident or act of nature results the damage, destruction or loss of something you own, then you may be eligible for a tax deduction. One is eligible for deducting the value of any loss not covered by insurance. However, the incident must be an event that is sudden, unexpected, and unusual to qualify as a casualty or theft loss.

A sudden event is one that is swift, not gradual or progressive. It does not include damage from events such as termite infestation or deterioration from normal wind and weather. An unexpected event is one that is ordinarily unanticipated and unintended. An unusual event is one that is not a typical, day–to–day occurrence, or relating to commonly engaged-in activities. Examples of casualties include car accidents, fires, earthquakes, hurricanes, tornadoes, floods, and vandalism.

To claim a casualty or theft loss, you must complete IRS Form 4684, Casualties and Thefts, and attach it to your income tax return. You may claim casualty or theft loss of personal use property only if you itemize deductions on IRS Form 1040, Schedule A.