Tax Memo

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33A Am. Jur. 2d Federal Taxation ¶ 16934

American Jurisprudence, Second Edition | August 2022 Update Federal Taxation ¶ 16000. Business and Nonbusiness Expenses—Bad Debts— Losses— Passive Activity Losses—Travel and Entertainment ¶ 16925. Casualty, Disaster, and Theft Losses.

¶ 16934. Auto accident damage.

References

Caution For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the

personal casualty and theft loss deduction is suspended, except for casualty losses incurred in a federally declared disaster (see ¶ 16926).

The below discussion applies only to business-related losses, personal

disaster-related losses, and pre-2018/post-2025 personal casualty and

theft losses. 21.1

Auto accident damage to taxpayer's auto is a casualty whether the auto is used in business or for pleasure (in pre-2018/post-2025 years), and whether the damage results from faulty driving by the taxpayer or the

driver of the vehicle with which taxpayer's auto collides, 22 or from

operation of taxpayer's auto by an unauthorized person. 23

But no casualty loss deduction is allowed for damage resulting from the willful act or willful negligence of a taxpayer or someone acting in his

behalf. 24 And damage caused by a collision in an auto race isn't a

casualty since such accidents are not unusual occurrences. 25

© 2022 Thomson Reuters. 33-34B © 2022 Thomson Reuters/RIA. No Claim to Orig. U.S. Govt. Works. All rights reserved.

Footnotes

I.R.C. § 165(h)(5)(A), as amended by Pub. L. No. 115-97, § 11044(a),

12/22/2017.

Reg. § 1.165-7(a)(3).

Shearer, George v. Anderson, (1927, CA2) 6 AFTR 6483, 16 F2d 995,

1 USTC ¶ 210, revg (1926, DC NY) 5 AFTR 6092, 13 F2d 258.

Reg. § 1.165-7(a)(3).

Ltr. Rul. 8227010.

End of Document

© 2022 Thomson Reuters. No claim to original U.S. Government Works.

RELATED TOPICS

Internal Revenue

Income Taxes Purpose of Theft Loss Deductions

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Federal Taxation

¶ 16000. Business and Nonbusiness Expenses —Bad Debts— Losses —Passive Activity Losses—Travel and Entertainment

¶ 16925. Casualty, Disaster, and Theft Losses.

¶ 16925. Casualty, Disaster, and Theft Losses.

¶ 16926. Casualty and disaster losses.

¶ 16927. Reporting a loss from casualty or theft— Schedule A; Forms 4684

¶ 16934. Auto accident damage. AMJUR FEDTAXN ¶ 16934 American Jurisprudence, Second Edition (Approx. 2 pages)

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Federal Taxation

¶ 16000. Business and Nonbusiness Expenses —Bad Debts— Losses —Passive Activity Losses—Travel and Entertainment

¶ 16925. Casualty, Disaster, and Theft Losses.

¶ 16925. Casualty, Disaster, and Theft Losses.

¶ 16926. Casualty and disaster losses.

¶ 16927. Reporting a loss from casualty or theft— Schedule A; Forms 4684