Line 20 - Casualty and Theft Losses:If you suffered a casualty or theft loss,you should complete Form 4684, Casualties and Thefts, to determine the amount of your loss to enter on this line. You must attach the form to your return.
Casulaty and theft losses include losses caused by:
Theft, vandalism, fire, storm, or similar causes;
Car, boat, and other accidents; and
corrosive drywall (see below for more information).
In addition, you may be able to take a casualty or theft loss deduction if you had money in a financial institution that you lost lost because of the insolvency or bankruptcy of the institution.
IMPORTANT: Do not deduct the costs of proving that you had a property loss on line 20. Instead, deduct those costs on Schedule A, Line 23, Other Expenses. Examples of these costs are appraisal fees and photographs used to establish the amount of your loss.
Limitations: This deduction is subject to two limitations. You can deduct personal casualty or theft losses only to the extent that:
The amount of each separate casualty or theft loss is more than $100, and
The total amount of all losses during the year (reduced by the $100 limit) is more than 10% of your adjusted gross income (the amount on Form 1040, line 38).
Corrosive drywall losses: If you had exepnses for repairs to your personal residence or household appliances because of corrosive drywall you may be able to deduct the amounts paid. See Publication 547, Casualties, Disasters, and Thefts, for more information.