The cost basis is asking for the cost of the item you lost. However, you will also need to enter the fair market value of the property immediately before and after the disaster, and this is how the deduction is determined (less a $500 exclusion). So, if the fair market value of the property is $850,000 now and it was $858,000 prior to the event, you'll have an $8,000 loss. Here is how to enter the expenses:
- Open or continue your return in TurboTax Online
- Navigate to Federal > Deductions & Credits > Disasters, theft, and other property loss or damage
- On the Casualties or Theft Event screen, select "This event qualifies as a Federally declared major qualified disaster loss"
For more information, see: Tax Credits for Those Affected by Natural Disasters
