Casualty Loss Deduction Calculator 2026 (Federally Declared Disaster)

What Is the Casualty Loss Deduction?

A casualty loss deduction lets U.S. taxpayers deduct property damage from a sudden, unexpected, or unusual event such as a hurricane, wildfire, flood, tornado, or earthquake. For tax years 2018 through at least 2025, the Tax Cuts and Jobs Act (TCJA) limited deductible personal-use casualty losses to events occurring in a federally declared disaster area (one with a FEMA Major Disaster Declaration). Business and income-producing property losses remain deductible regardless of disaster status. Source: IRS Publication 547. Last updated: May 3, 2026.

The deductible amount is calculated using the smaller-of rule: take the smaller of (a) your adjusted cost basis in the property, or (b) the decline in fair market value caused by the casualty. Then subtract any insurance or other reimbursement, the $100 per-event floor (personal use only), and 10% of your AGI. The remainder is reported on Form 4684 and flows to Schedule A as an itemized deduction.

The Smaller-of Rule and Two Floors (2026)

For personal-use property in a federally declared disaster, the casualty loss formula is:

• Step 1 — Smaller-of: Take the lesser of your adjusted basis in the property or the decline in fair market value (FMV before − FMV after the casualty).
• Step 2 — Insurance: Subtract any insurance, FEMA, or other reimbursement received or expected.
• Step 3 — $100 floor: Subtract $100 per separate casualty event (not per item lost).
• Step 4 — 10% AGI floor: Subtract 10% of your Adjusted Gross Income from the remaining loss.
• Step 5 — Schedule A: The result is your deductible casualty loss, reported on Schedule A as an itemized deduction.

Business or income-producing property is not subject to the federally-declared-disaster limit, the $100 floor, or the 10% AGI floor. Instead, business losses are reported on Form 4684 Section B and flow through to Schedule C, E, or F depending on use. The deduction is limited to your adjusted basis in the property.

Personal vs Business Property: Why It Matters

Personal-use real property includes your primary home, vacation home, and personal contents (furniture, clothing, electronics). Personal-use vehicles include your daily driver and family second car. Business property includes rental real estate, equipment used in a trade, and inventory. The classification determines which rules apply:

For personal-use property, all four floors apply (federally declared disaster + smaller-of + $100 + 10% AGI), and the loss is an itemized deduction. If you take the standard deduction, you receive no benefit from a personal-use casualty loss in 2026 — unless you elect to claim it on the prior year's return under the special qualified-disaster-loss rules in Section 165(i). For business property, only the smaller-of rule and insurance offset apply, and the loss reduces ordinary business income directly.

Federally Declared Disasters and Form 4684 (2026)

A federally declared disaster is a major disaster or emergency declared by the President under the Stafford Act. FEMA maintains the official list at fema.gov/disasters. The IRS provides a separate disaster relief page listing federal tax filing extensions and casualty loss eligibility for each event. Common 2025–2026 disasters include hurricanes (Helene, Milton), California wildfires, Midwest tornado outbreaks, and Texas/Florida flooding events.

You report your casualty loss on Form 4684 (Casualties and Thefts). Section A is for personal-use property and Section B for business or income-producing property. Most personal-use disaster losses can be claimed in either the year of the loss or by amending the prior year's return — choose whichever year gives a larger refund. This calculator applies the standard 2026 rules; verify the final law and any OBBB Act 2025 modifications with IRS Form 4684 2026 instructions before filing. Last updated: May 3, 2026.