Based upon my limited knowledge of Regs. Sec. 1.165-8(d), and based on your description, you are eligible to deduct 95% of your loss, using the safe harbor method, in year you discovered the loss.
To use the safe-harbor provisions of Rev. Proc. 2009-20, a taxpayer must attach a statement—signed under penalties of perjury—to its tax returns stating that it has written documentation to support the amount of the loss; however, the revenue procedure does not specify the source, form, or required content of the documentation.
You cannot attach a statement to a return in TurboTax; therefore, you will not be able to e-file your tax return. You will have to print and mail your return.
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