Tax Year Prior to 2020: Can I claim purchase of a replacement car if original car was totaled in accident?

clgarland — Wed, 03 May 2023 16:36:11 GMT

I was in Hit and Run accident and needed replacement car.

No, you cannot claim the replacement car. However, you m...

KarenL2 — Sat, 01 Jun 2019 04:54:58 GMT

No, you cannot claim the replacement car. However, you may qualify for a Casualty Loss deduction for the original car. When you lose an item due to an accident, theft, or act of nature, you may have a tax deduction for the value of the property that is not covered by your insurance.

The software will walk you through it, but here is how it works: Individuals are required to claim their casualty and theft losses as an itemized deduction on Form 1040, Schedule A Itemized Deductions.

For property held by you for personal use, Subtracted any salvage value (zero for theft) and any insurance or other reimbursement from the loss amount.
Then, subtract $100 from each casualty or theft event that occurred during the year.
Then, take that amount and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.
That's the amount that goes on your Schedule A Itemized Deductions.

If your property is personal-use property or is not completely destroyed, the amount of your casualty loss is the lesser of:

The adjusted basis of your property, or
The decrease in fair market value of your property as a result of the casualty

More details can be found at this link http://www.irs.gov/taxtopics/tc515.html

That said, the amount would have to be pretty large for you to be able benefit. Also, you must file Schedule A as I stated above. But, if you want to give it a shot in the Casualty and Theft section of the software, it wouldn't hurt.

How to enter it into TurboTax: While inside the software and working on your return, type casualty loss in the Search at the top of the screen (you may see a magnifying glass there). There will be a popup that says Jump to casualty loss. Select that to get to the general area.

topic Tax Year Prior to 2020: Can I claim purchase of a replacement car if original car was totaled in accident? in Deductions & credits

Tax Year Prior to 2020: Can I claim purchase of a replacement car if original car was totaled in accident?

No, you cannot claim the replacement car. However, you m...