Chapter 7: Itemized Deductions

01.Core Concepts

If casualty gains exceed casualty losses: • Gain offsets any casualty losses suffered in the same year. • Excess gains are treated as the sale of a capital asset. • Can be short-term or long-term, depending on holding period of the asset. • Deferral of gain provisions may apply and will be discussed in the non-taxable exchanges chapter. • Personal casualty and theft gains and losses are not netted with the gains and losses on business and income-producing property.