First, you should contact your insurance company and let them know that you have a loss. But lets say, your insurance lapsed and you wish to deduct the loss suffered on your taxes. Let’s say you rent your space and several thousand dollars of electronics were stolen. You get to deduct, the lesser of the cost of those electronics or fair market value.
Let’s say you’re a landlord and a plate glass window was destroyed and it cost $1,000 to fix. Your deduction is the lesser of: calculated as follows: Fair market value of the building before the loss minus fair market value after the loss or cost of replacement. So, let’s say despite the broken plate glass window the value of your building stayed the same, no deduction. So, around next April, you will start to hear squeals of pain, when business people discover they don’t even have much of a tax deduction.