Car accident and a loss - can I write that off?

Hi everyone :)

I had a car accident (luckily nobody was injured) and the car was declared a total loss. With the understanding that the car is for personal use, can I write off the deductible? I see something on the IRS site saying that a "casualty loss" is not deductible, but an accident seems to not fall within the criteria listed.

Thanks in advacne for any insight.

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JMSSGV

The only thing it would qualify for is a casualty loss which, as you say, is no longer an allowable itemized deduction (unless you're in a Federally-declared disaster area.) And didn't you receive any compensation from insurance for your loss? https://www.irs.gov/taxtopics/tc515

JamesMcDoug

That link is the one I was looking at, but thank you for posting it.

As far as what I received from insurance for the loss - I received a check for the market value of the car, minus the deductible. If there was no deductible, and had I received a check for the market value, there would be nothing to write off, as there would not be a loss. But to me, that $ amount the insurance company deducted from the check qualifies as a loss. That art states:

A casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption.

Does a collision qualify for the above?

JMSSGV

Yes, a car accident would give rise to a casualty loss but unless you live in a Federally-declared disaster area or you are planning to claim this loss on a state income tax return where such losses are still deductible, there's no point in pursuing it.

https://www.irs.gov/publications/p547#:~:text=This%20publication%20explains%20the%20tax,car%20accident%2C%20or%20similar%20event.

JamesMcDoug

Thank you for the link. Please do not take this as me being stubborn; I am not trying to be. But, TBH, I am indeed trying to find any way (loophole) to see this through.

The link you posted got me here:

https://www.irs.gov/publications/p547#en_US_2024_publink1000225204

A casualty loss isn’t deductible…

A car accident if your willful negligence or willful act caused it.

But what if I did not cause the accident? Or what if my insurance co. accepted liability, but it wasn't willful negligence?

I see what the law is saying and trying to do here, but there appears to be some wiggle room…. maybe?

Thanks again for the time.

JMSSGV

ONCE AGAIN - It doesn't matter if it's a casualty loss or not - it is NOT DEDUCTIBLE on your Federal return unless you're in a disaster area. No exceptions. No wiggle room.

Not sure why you keep asking the same question when it has no effect on your taxes.

kiarab

Hi,

Since the Tax Cuts and Jobs acts, a lot of things that used to be deductible are no longer deductible. Casualty loss is one of those. I can understand how it may seem that you may be able from the wording from Publication 547. This is because the Tax Cuts and Jobs act is a temporary act that is set to expire this year unless Congress extends it or makes it permanent.

But since it is temporary for now, the original casualty deduction rules are still there, just not in effect right now.

However, if you look near the top of the publication, it says:

Deductible losses.

For tax years 2018 through 2025, if you are an individual, casualty losses of personal-use property are deductible ONLY if the loss is attributable to a federally declared disaster (federal casualty loss).