18.11 Nondeductible Casualty and Theft Losses

Review the rules (18.1, 18.9) to make sure you have a deductible casualty or theft. Certain losses, though “casualties” for you, may not be deducted if they are not due to theft, fire, or from some other sudden natural phenomenon. The following have been held to be nondeductible losses:

• Termite damage (18.1)
• Carpet beetle damage
• Dry rot damage
• Damages for personal injuries or property damage to others caused by your negligence
• Legal expenses in defending a suit for your negligent operation of your personal automobile
• Legal expenses to recover personal property wrongfully seized by the police
• Expenses of moving to and rental of temporary quarters
• Loss of personal property while in storage or in transit
• Loss of passenger’s luggage put aboard a ship. The passenger missed the boat and the luggage could not be traced.
• Accidental loss of a ring from your finger
• Injuries resulting from tripping over a wire
• Loss by husband of joint property taken by his wife when she left him
• Loss of a valuable dog (or family pet) that strayed and was not found
• Steady weakening of a building due to normal wind and weather conditions
• Damage to a crop caused by plant diseases, insects, or fungi
• Damage to property from drought in an area where a dry spell is normal and usual
• Damage to property caused by excavations on adjoining property
• Damage from rust or corroding of understructure of house
• Moth damage
• Dry well
• Losses occasioned by water pockets, erosion, inundation at still water levels, and other natural phenomena (there was no sudden destruction.)
• Death of a saddle horse after eating a silk hat
• A watch or spectacles dropped on the ground
• Sudden drop in the value of securities
• Loss of contingent interest in property due to the unexpected death of a child
• Improper police seizure of private liquor stock
• Chinaware broken by a family pet
• Temporary fluctuation of property value
• Damage to property from local government construction project
• Fire purposely set by owner
• Engine damage due to failure to use antifreeze

Note: Some of the above items may be allowed as business expenses.