In order to deduct a theft loss, one has to prove: (1) the occurrence of a theft; (2) the amount of the theft loss; and (3) the year in which the theft loss was discovered. (IRC §165(a)(c)(e)).

casualty loss. loss of property due to fire, storm, shipwreck, theft or other casualty, which is allowable, net of insurance reimbursement, as a deduction in computing taxable income. To qualify as a casualty loss, a loss must be due to a sudden, unexpected, or unusual event.

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. A casualty doesn't include normal wear and tear or progressive deterioration.

For tax years 2018 through 2025, if you are an individual, casualty or theft losses of personal-use property are deductible only if the loss is attributable to a federally declared disaster. You must use a separate Form 4684 (through line 12) for each casualty or theft event involving personal-use property.

Attach Form 4684 to your tax return to report gains and losses from casualties and thefts.

Following Losses are Deductible from Business Income Loss of stock-in-trade due to destruction by an act of God. Loss arising on account of failure on the part of the assessee to accept delivery of goods. Depreciation in funds kept in foreign country for purchase of stock-in-trade.

Casualty Losses 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. A casualty doesn't include normal wear and tear or progressive deterioration.