Q. This is an unusual question. Can I deduct the loss of sperm at a sperm bank as a casualty or theft loss? R.A.W., San Francisco
A. We could not find any definite authority on this issue. However, in Pub. 547, Casualties, Disasters and Thefts, the IRS says that an accidental loss or disappearance of property may be characterized as a casualty if it results from an identifiable event that is “sudden, unexpected, or unusual.” It would seem that the loss or destruction of sperm at a sperm bank would qualify, but it will be difficult establishing a value for the donated sperm. Finally, you must have tax basis in property for a casualty loss to be allowed. It seems unlikely you would have any tax basis in donated sperm.
Tip: The usual casualty loss limit of 10% of adjusted gross income and a $100 reduction per event still apply.