What are the limits to the losses I can deduct?

Once you determined the value of your property loss, you need to determine how much of that loss you can actually claim. This requires looking at the purpose of the property. If you used the property to produce income (such as rental property) or for other business purposes, you can claim the full value of the loss. However, if the property was for personal use, you have to apply the $100 limit and the 10% limit.

First, for each individual piece of property which you are claiming a loss for, you must reduce the value of that loss by $100. The only exception to this rule is that if multiple pieces of property were lost or damaged as the result of a single event (for example, where your car and house were both damaged by a storm), you only need to subtract the $100 once.

Second, the total losses for any personal-use property must be reduced by 10% of your adjusted gross income. This means that you have no loss which you can claim if their value is for less than 10% of your adjusted gross income. For example, if your adjusted gross income was $45,000, you will only have a loss deduction for personal-use property if the loss is valued at more than $4,500, and then, your claim can only be for the amount over that $4,500 limit.