How is casualty loss determined for personal property?

Casualty loss for personal property is determined separately for each item. This approach ensures that the assessment is accurate and reflects the specific value of each individual piece of property that has been damaged or lost due to a casualty event. By evaluating each item on its own, the taxpayer can arrive at a more precise estimate of the total loss, taking into account factors such as the item's fair market value immediately before the casualty and its value immediately after the event.

The importance of assessing loss for each item separately lies in the diverse values that different pieces of personal property can have. For instance, a damaged piece of furniture may have a different value compared to an electronic device affected by the same casualty incident. This method allows for a clearer and more accountable process for determining the casualty loss deduction, as the IRS guidelines emphasize the need for accurate and itemized reporting in tax situations related to personal property losses.