Yes. To take a deduction like this, follow these steps:
- Login to your return.
- Click on the Federal option in the left hand navigation bar.
- Click on the Deductions and Credits tab at the top of the screen.
- Scroll down in the list of Deductions and Credits to the option section labeled Other Deductions and Credits.
- Click on the option labeled Other Deductible Expenses.
- Continue until your each a screen labeled "Did you have any of these other deductions?" and click Yes.
- Enter your loss in the line labeled "Unrecovered investment in annuity"
If the annuity company has declared bankruptcy, you may need to provide documentation of the bankruptcy and the loss incurred. This could include statements from the annuity provider and any legal notices related to the bankruptcy.
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