Casualties and Thefts
If you suffer a casualty or theft loss to business property, you can deduct the loss. There are no dollar limitations on these losses, as there are on personal losses. Nor are there adjusted gross income (AGI) limitations on these losses, as there are on casualty and theft losses to personal property.
Definition of Casualty
If your business property is damaged, destroyed, or lost because of a storm, earthquake, flood, or some other “sudden, unexpected or unusual event,” you have experienced a casualty. For losses to nonbusiness property (such as your personal residence), the loss must fall squarely within the definition of a casualty loss. Losses to business property need not necessarily satisfy the same definition.
The tax law details what is considered a “sudden, unexpected or unusual event.” To be sudden, the event must be one that is swift, not one that is progressive or gradual. To be unexpected, the event must be unanticipated ...