Suppose your home or other personal (non-business) property is damaged or destroyed in a disaster such as the recent Los Angeles fires or North Carolina floods.
In that case, you might qualify to deduct your uninsured losses from your income taxes. Recent changes in the law make this complex deduction easier to obtain.
Only Losses Due to Federal Disasters Are Deductible
Property losses caused by sudden, unexpected, or unusual events such as fires, floods, earthquakes, and hurricanes are called casualty losses. In the past, all types of casualty losses were deductible, but the Tax Cuts and Jobs Act of 2017 radically changed the rules.
From 2018 through 2025, casualty losses to non-business property such as your home, belongings, or car will be deductible only if a federally declared disaster causes them.
All other casualty losses to personal non-business property are not directly deductible during these years—they may be deducted only from casualty gains (which you may have).
Example 1. In 2025, a federally declared disaster (a wildfire) destroyed your home. You can take a casualty loss deduction for your uninsured losses.
Example 2. In 2025, an accidental house fire due to a faulty fireplace (no federal disaster) destroyed your home. You get no casualty loss deduction.
Key point. You can have a casualty gain. That’s a taxable event. For some ideas on how to deal with the gain, see Wildfires, Floods, Hurricanes: How the IRS Has Your Back.
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