I have only unemployment income of $19,400 in 2011. I incurred a theft of $7,500 for stolen tools from my home in 2011. Can I use this type of theft as a deduction against unemployment income?

ANSWER

The BIDaWIZ Team's Answer:

If unemployment is your only income for the year, you can reduce the $19,400 by the standard deduction in 2011 of $5,800 and the personal exemption of $3,700. Therefore, your adjusted gross income would be $9,900. If your casualty loss was $7,500, you could deduct $7,500 less $100 which equal $7,400 less 10% of your AGI of $9,900. $7,400 less $990 equals $6,410. Therefore $6,410 would likely be deductible to reduce your $9,900 in income. Make sure you have documentation to support this loss.