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Casualty Loss / Gain Calculator (Federal & CA)

Last reviewed: June 10, 2025

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Casualty Loss Calculator

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Get personalized help with casualty loss / gain calculator (federal & ca)

Casualty Loss / Gain Calculator (Informational Only. Consult your tax advisor.)

Use this calculator to determine:

  1. Recognized casualty loss when insurance < adjusted basis.
  2. Deferred or recognized gain when insurance > basis (possible §121 exclusion or §1033 deferral).

Property-Specific Calculator

Select your property type for customized calculations and recommendations tailored to your situation.

Select Your Property Type

Your main home where you live most of the year

Special Rules for Primary Residence

  • •§121 exclusion available: $250K single / $500K married filing jointly
  • •4-year replacement period in federal disasters
  • •Personal casualty losses only deductible in federal disasters
  • •Must exceed 10% of AGI after $100 floor

Casualty Loss Calculator

Calculate your tax gain or loss from property damage

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Tips for Primary Residence

  • •Track all home improvements to increase basis
  • •Consider timing of gain recognition
  • •You may elect to claim loss in prior year

Explore real-world examples to better understand how the calculations work for different property types and scenarios.

Interactive Examples Gallery

🏠

Primary Home Total Loss

Your main home in Pacific Palisades was completely destroyed. Insurance coverage was less than your basis.

📉Loss: $50,000
🏠

Primary Home with Gain

Long-time homeowner receives insurance exceeding basis. Eligible for §121 exclusion.

📈Gain: $500,000
🏖️

Secondary Home - Mixed Use

Beach house used personally 75% and rented 25% of the year.

📈Gain: $50,000
🏢

Rental Property with Depreciation

Rental property owned for 10 years with significant depreciation taken.

📈Gain: $150,000
💼

Business Equipment Loss

Restaurant equipment and inventory destroyed in fire.

📈Gain: $50,000

How the Calculator Works

The calculator guides you through:

  • Original cost basis & improvements
  • Insurance proceeds breakdown
  • Fair Market Value (FMV) before and after the disaster
  • Automatic calculation of gain or loss
  • Property-specific tax rules and exclusions
  • Smart recommendations based on your results

Important Tax Concepts

Primary Residence

  • §121 Exclusion: Exclude up to $250,000 ($500,000 if married filing jointly) of gain
  • Must have owned and used as main home for 2 of last 5 years
  • No replacement required if using exclusion
  • Personal casualty losses deductible only in federal disasters

Secondary Home

  • No §121 exclusion available
  • Must allocate between personal and rental use if applicable
  • Personal portion follows primary residence rules
  • Rental portion may have depreciation recapture

Rental Property

  • Depreciation recapture taxed as ordinary income (up to 25%)
  • Remaining gain taxed as capital gain
  • Business casualty losses fully deductible
  • Must replace with rental property for §1033 deferral

Business Property

  • §1231 property may qualify for capital gain treatment
  • Equipment and inventory typically ordinary income
  • Consider §179 and bonus depreciation recapture
  • Business interruption insurance is ordinary income

Federal Disaster Benefits

Extended Replacement Period

  • 4 years instead of 2 years to replace property
  • More flexibility in replacement property type
  • Can relocate anywhere in the US

§139 Exclusions

  • Living expense reimbursements are tax-free
  • Disaster mitigation payments excluded
  • Employer disaster assistance not taxable

If You Have a Loss

  • Personal casualty losses are only deductible for federally declared disasters
  • Subject to $100 per casualty floor and must exceed 10% of AGI
  • Can elect to deduct in the prior tax year
  • Business losses fully deductible without limitations

Need Help?

The calculator provides:

  • Step-by-step guidance through inputs
  • Automatic calculations with explanations
  • Property-specific recommendations
  • Visual examples you can modify
  • Smart recommendations based on your results

Remember to consult with a tax professional for advice specific to your situation.

Relevant Resources

IRS Topic 515 - Casualty, Disaster, and Theft Losses

Overview of casualty loss deductions and calculations

IRS Publication 584 - Casualty Loss Workbook

Workbook to help calculate personal property losses

Tax Relief for Disaster Victims

IRS guidance on special tax provisions for disaster victims

FTB Disaster Loss Documentation

California Franchise Tax Board disaster loss resources

These resources are provided for informational purposes only. Always consult with qualified tax and legal professionals for advice specific to your situation.

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Disclaimer: This information is educational only. Consult a qualified tax professional for advice specific to your situation.

Legal References:

  • IRC §121
  • IRC §165
  • IRC §1033