The company and I are in negotiations and they aren't even paying the amount my property is insured for. They're about $4,500 off.
Maybe. You will want to wait until the final decision is made if they are personal belongings. That said, if you planned on selling them, and you have a business, the cost you paid for those items (minus reimbursement) can be deducted as a normal business expense on your Schedule C.
If they are your own personal belongings, you could try to claim a Casualty/Theft loss. When you lose an item due to an accident, theft, or act of nature, you may have a tax deduction for the value of the property that is not covered by your insurance (or reimbursed).
The software will walk you through it, but here is how it works: Individuals are required to claim their casualty and theft losses as an itemized deduction on Form 1040, Schedule A Itemized Deductions.
If your property is personal-use property or is not completely destroyed, the amount of your casualty loss is the lesser of:
More details can be found at this link http://www.irs.gov/taxtopics/tc515.html
That said, the amount would have to be pretty large for you to be able benefit. Also, you must file Schedule A as I stated above. But, if you want to give it a shot in the Casualty and Theft section of the software, it wouldn't hurt.
How to enter it into TurboTax: While inside the software and working on your return, type casualty loss in the Search at the top of the screen (you may see a magnifying glass there). There will be a popup that says Jump to casualty loss. Select that to get to the general area.