hen a hurricane strikes your home, or a burglar breaks in and steals your most valued possessions, the effects are emotionally devastating.

The only financial solace comes a year later when the government allows you to deduct the losses on your tax statement. So after the tears and anger, start calculating the extent of the damage.

A casualty is legally defined as when property is damaged or destroyed from a sudden and unexpected event. Deductible casualty losses may result from a number of different causes, including automobile accidents, civil disturbances, drought, earthquakes, explosions, fire, flood, freezing rain, ice and snow, hurricanes, lightning, mine cave-ins, shipwrecks, smog, sonic booms, storms, vandalism, winds and tornadoes.

The event must be sudden and swift, not gradual or progressive. For example, the gradual erosion and damage to homes or other structures caused by weather and age does not qualify for a tax deduction. But if a burst water heater damages your carpet, floor and furnishings, that qualifies.

If trees, shrubs or other plants are damaged or destroyed by a fungus, disease, insects, worms or similar pests, the loss is not deductible as a casualty loss. However, a sudden, unexpected or unusual infestation by beetles or other insects may result in a casualty loss. If a storm, flood or fire damages trees and shrubs, the loss also is a casualty loss.

The Tax Reform Act of 1986 imposed new regulations before you can deduct casualty losses. Any loss covered by insurance is taken into account, to the extent of the insurance coverage. For example, if a fire causes $800 in damages to your home and you have a policy containing a $500 deductible, the government will not allow you to claim the $300 you could have received from the insurance company. The $500 balance not covered by your insurance policy will count (subject to a $100 deductible and 10 percent adjusted gross income floor).

A theft is the unlawful and intentional removal of money or property from its rightful owner. It includes, but is not limited to, larceny, robbery and embezzlement. If money or property is taken as a result of extortion, kidnapping for ransom or blackmail, it may also be a theft.

If you lose a few hundred dollars just because you're careless, the government won't underwrite your losses. However, if a huge gust of wind blows the bills out of your hands - and you can prove it - that may qualify as a casualty loss that you can then deduct. The amount of loss deductible from a theft is the same as from a casualty.

Ordinarily, a casualty loss is deductible only in the year the event took place. However, a special provision in the tax code allows for "disaster area" loss deductions in the year prior to the occurrence. To qualify, the president must declare the region a "disaster area" eligible for federal relief under the Disaster Relief Act of 1964. Once this is done, you can elect to treat the entire loss as having occurred in the prior tax year. This allows you to get an immediate tax benefit rather than waiting until the subsequent year to claim it.

For example, the president declared the Portland, Ore., area a disaster area because of the extensive flooding it sustained in December 1996. Area residents who suffered extensive losses were then allowed to immediately claim the losses on their 1995 returns. (They had to file amended 1995 returns on a 1040X.) Alternatively, if they could not itemize in 1995 (even with the casualty deduction) or if their tax brackets were higher in 1996, they could deduct those losses on their 1996 returns filed in 1997. The choice was theirs. If the damage was in January 1997, they could have deducted it on their 1996 returns, rather than having to wait until 1998 when they file their 1997 returns.

Nobody wants to incur casualty and theft losses, just as nobody wants to incur medical expenses. However, in both cases, the allowance of deductibility can reduce the hurt of the loss. The pain is still there, but at least you can share it with the IRS.