Casualty and Theft Loses

Dear client: I am writing to inform you about the severe new limits placed on individuals’ itemized deductions of casualty and theft losses that were made by the Tax Cuts and Jobs Act, effective beginning in 2018. Before the Tax Cuts and Jobs Act, individuals could claim as itemized deductions certain personal casualty losses, not compensated by insurance or otherwise, including losses arising from fire, storm, shipwreck, or other casualty, or from theft. There were two limitations to qualify for a deduction: (1) a loss had to exceed $100, and (2) aggregate losses could be deducted only to the extent they exceeded 10% of adjusted gross income. However, for tax years 2018 through 2025, the personal casualty and theft loss