1.26 Ark. Code R. 51-424(a)(1)

Current through Register Vol. 49, No. 10, October, 2024

Rule 1.26-51-424(a)(1) - Losses

Losses sustained during the tax year, and not compensated for by insurance or otherwise are fully deductible if:

1) Incurred in a trade or business;

2) Incurred in any transaction entered into for profit;

3) Losses of property not connected with a trade or business if these losses arise from fires, storms, shipwrecks, other casualty, or theft, only to the extent that the amount of the loss from each casualty or theft shall exceed one hundred dollars ($100.00) and if the aggregate amount of all such losses sustained by an individual during any one (1) income year exceeds ten percent (10%) of the net income of the individual for that income year.

There shall be allowed any loss attributable to a disaster occurring in an area subsequently determined by the President of the United States to warrant assistance by the Federal government under the Disaster Relief Act of 1974. A taxpayer may elect to deduct this loss, less one hundred dollars ($100.00), for the year immediately preceding the tax year of the disaster. For example, if a taxpayer experiences a loss in 1993 and elects to carry the loss back to 1992, the loss is deductible only to the extent that it exceeds ten percent (10%) of the adjusted gross income for 1992.

1.26 Ark. Code R. 51-424(a)(1)