Deductions & credits

For tax years 2018 through 2025, if you are an individual, losses of personal-use property from fire, storm, shipwreck, other casualties, or theft are deductible only if the loss is attributable to a federally declared disaster (federal casualty loss). 

See FEMA's website to find out what disaster areas have been declared that produced the types of casualties allowable for personal-use property.

If the items stolen were business-use property used in a Schedule C or other business, they aren't subject to the same limitations for personal-use property.

A casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. A casualty doesn't include normal wear and tear or progressive deterioration.

Federal casualty losses, disaster losses, and qualified disaster losses are three categories of casualty losses that refer to federally declared disasters. The requirements for each loss vary. For more information, see Publication 547 or refer to the Instructions for Form 4684.

Theft is the taking and removal of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and must have been done with criminal intent. The amount of your theft loss is generally the adjusted basis of your property because the fair market value of your property immediately after the theft is considered to be zero.

To report the loss of business property due to theft in TurboTax Online:

1. Go to Deductions & Credits
2. Select Disasters, theft, and other property loss or damage
3. Click to add a casualty or theft
4. Fill in the Description of the event (e.g., "theft")
5. Fill in the date
6. Select Income-Producing Property as the Property Type
7. Choose "no" when asked if it was used in a passive activity (assuming it's used in your Schedule C business)
8. Enter Description of property, date acquired, cost basis, and any insurance reimbursement
9. Enter fair market value before and after the casualty (if lost due to theft, value after is 0)
10. Select "I used this property in my business"
11. Select Done

When you preview your return, look for the loss to appear on Form 4797.