Losses You Can’t Deduct

• Money or property misplaced or lost.

• Breakage of china, glassware, furniture, and similar items under normal conditions.

• Progressive damage to property (buildings, clothes, trees, etc.) caused by termites, moths, other insects, or disease.

• A decline in market value of stock, caused by disclosure of accounting or other illegal misconduct by the officers or directors of the corporation that issues the stock, that was acquired on the open market for investment. You may be able to deduct it as a capital

loss on Schedule D (Form 1040) if the stock is sold or exchanged or becomes completely worthless. See chapter 4 of Pub. 550, Investment Income and Expenses.

Note: Victims of scams and fraudulent investment schemes may be eligible to claim a theft loss deduction if certain conditions apply. See Losses From Financial Scams and Losses From Ponzi-Type Investment Schemes , later, for more information.