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Casualty deduction floor: Back to bottom

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. Do we have to deduct $500 from our casualty loss deduction in a disaster area? M.C.L., Joplin, Mo.  

A. No. However, for each casualty loss you suffer this year, you must deduct a floor of $100. The $100 casualty loss floor was temporarily raised to $500, but only for the 2009 tax year. It’s back to $100 now. You must subtract $100 before subtracting 10% of your adjusted gross income.

Tip: The $100 and 10%-of-AGI subtractions apply to all personal casualty losses, including those incurred in a federal disaster area.


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