Limitation on losses of individuals
In the case of an individual, the deduction under subsection (a) shall be limited to—
(1)#
losses incurred in a trade or business;
(2)#
losses incurred in any transaction entered into for profit, though not connected with a trade or business; and
(3)#
except as provided in subsection (h), losses of property not connected with a trade or business or a transaction entered into for profit, if such losses arise from fire, storm, shipwreck, or other casualty, or from theft.