When you have items that are lost or damaged as a direct result of a natural disaster, and you live in a federally declared disaster area, you may be able to take a tax deduction for the value of the property that's not covered by your insurance. What if I have property that was lost or damaged (a casualty loss)?
This article outlines what tax relief is available and who would qualify. Tax Benefits Available for Victims of Natural Disaster You can claim casualty loss in the tax year it occurs or the previous tax year (which allows you to reap the tax benefit sooner). For example, if you suffered a casualty from a recent natural disaster, you can claim it on your 2022 taxes or on your tax year 2021 taxes. The deadline for choosing which tax year to claim your casualty loss is generally the due date of your current-year return. If you’ve already filed your 2021 taxes, you can claim your loss by filing an amended tax return. You can use TurboTax to amend your tax return on Form 1040X, writing “Disaster” in red at the top of the tax return and the name of your city, county or state that was declared a disaster area.
If you take deductions on your rental property for depreciation or casualty losses, you reduce your basis.
Rental property casualty loss due to fire and capital gains
Publication 551
When your rental losses are limited by your income, you are incurring a net operating loss (NOL). The NOL is carried forward until you are under the income limit or until you sell the property. You can't take those losses until the year you sell or otherwise dispose of the property. You'll see those carry over losses on IRS Form 8582 line 1d.
Why can't I deduct rental loss
Selling Rental Real Estate at a Loss
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