What is an example of a deduction that is NOT allowed for casualty losses?

A deduction for casualty losses generally pertains to losses arising from unexpected events, specifically those that are deemed sudden, destructive, and identifiable. In this context, damage from pests like termites does not qualify as a deduction for casualty losses because it is considered a gradual loss rather than a sudden event. The IRS distinguishes between sudden catastrophes, which are eligible for deductions, and losses stemming from wear and tear, deterioration, or pest infestations that accumulate over time.

In contrast, losses resulting from natural disasters, theft, and vandalism are categorized as casualty losses since they involve dramatic and often unexpected incidents leading to property damage or loss. This clarifies why damage from pests is excluded from qualifying deductions under casualty losses.