LOSSES BY INDIVIDUALS
01.Core Concepts
• Generally, personal losses are not deductible. • Example: Loss on sale of personal residence is not deductible. • Individuals can deduct losses: • Incurred in a trade or business, or • Incurred in a transaction entered into for profit, or • Caused by fire, storm, shipwreck, or other casualty or by theft (if the loss resulted from a presidentially declared disaster during tax years 2018- 2025). • OBBBA permanently retains the casualty loss limitation requiring that the loss be from a presidentially declared disaster but expands the definition to include state declared disasters for tax years beginning after December 31, 2025.