1. A taxpayer’s loss that may be deducted in computing net taxable income, as when the loss occurred as a result of embezzlement or theft. See Alison v. U.S., 344 U.S. 167, 170, 73 S.Ct. 191, 192 (1952). 
1. Losses resulting when a taxpayer’s property is destroyed, damaged, confiscated, stolen, abandoned, taken by foreclosure, becomes entirely worthless or suffers other special losses, which a taxpayer is permitted to deduct in computing his net income for tax purposes providing the losses are not fully compensated by the insurance or otherwise. 34 Am J2d Fed Tax ¶ 6500. 
1. In tax law, expenses that a taxpayer is permitted to subtract, in whole or in part, in computing her taxable income. EXAMPLES: interest on the mortgages on one’s home; casualty losses; charitable contributions. See deduction.
2. In insurance, portion of a loss that the insured must pay from his own pocket before the insurance company will begin to make payment. USAGE: “Because my policy has a $500 deductible, my insurance company will pay only $2,000 of the $2,500 damage to my car.“
3. That which may be subtracted. 
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: Ballantine’s Law Dictionary with Pronunciations
Third Edition by James A. Ballantine (James Arthur 1871-1949). Edited by William S. Anderson. © 1969 by THE LAWYER’S CO-OPERATIVE PUBLISHING COMPANY. Library of Congress Catalog Card No. 68-30931
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