Enrolled Agent Exam [Part 1] 37, Casualty and Theft Loss Deductions

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • Personal casualty and theft losses are only deductible if they occur in a federally declared disaster area. • The deductible loss is calculated by taking the lesser of the property's basis or the decrease in FMV, then subtracting insurance payouts. • Each casualty event is subject to a $100 reduction, followed by a reduction of 10% of the taxpayer's Adjusted Gross Income (AGI). • The strict disaster area rule does not apply to business or income-producing property, which is a common exam distinction. • Taxpayers may elect to deduct the loss on the tax return for the year preceding the disaster year, potentially for a greater tax benefit. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep