Can I deduct casualty and theft losses?

If you are itemizing your deductions, rather than taking the standard deduction, you can generally deduct losses for property which was stolen, damaged or destroyed in an accident or an act of nature. The three types of deductible losses are:

1. Casualty losses.

2. Theft losses.

3. Loss on deposits.

If the property which you lost was used for personal purposes, there are certain limits that apply to your deduction, although the 2% reduction does not apply.