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Legal Definitions - casualty loss

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Definition of casualty loss

Casualty loss refers to a loss of property caused by a sudden, unexpected, and external event such as a fire, storm, or theft. This loss can be claimed as a deduction on your taxes if it is related to a trade or business or a transaction entered into for profit.

For example, if your business property is damaged in a fire, you may be able to claim a casualty loss deduction on your taxes. Similarly, if your car is stolen and you use it for business purposes, you may be able to claim a casualty loss deduction for the value of the car.

The tax code has specific rules for claiming casualty loss deductions, so it's important to consult with a tax professional to ensure you are following the correct procedures.

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Simple Definition

A casualty loss is when something unexpected and outside of your control happens to your property, like a fire or a storm. If you have a personal casualty loss, which means you lost something related to your business or something you were trying to make money from, you may be able to get a tax deduction for the loss. This is because the tax code has rules for how to handle these types of losses.

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