2022 small business my storage unit that housed my equipment was stolen. I got a settlement from public storage but did not cover all my losses. Can I deduct my loses

[streben333]

My loss was around $12,000 they gave me $6500 can I deduct the remainder if so where and what form?

[GeorgeM777]

Yes.  You report your unreimbursed business theft loss in TurboTax as follows:

In TurboTax CD/download, select Personal, then Deductions & Credits, then,

1. Scroll down the screen to Other Deductions and Credits.
2. Select Casualties and Thefts.
3. At the screen, Casualty or Theft Event, select the option for Income-Producing Property and continue to enter your information. 

If you are using TurboTax online, the process is similar.   After signing in, select Federal (left margin), then select Deductions & Credits.

1. Scroll down the screen to Other Deductions and Credits.
2. Select Disasters, theft, and other property loss or damage.
3. At the screen, Did you have anything damaged or stolen during a recent federal disaster?, select Yes.
4. Then continue to enter your information.

In order to claim a theft loss deduction, the taxpayer must prove:

1. that a theft occurred under the law of the jurisdiction wherein the alleged loss occurred, 
2. the amount of the loss; and 
3. the date the taxpayer discovered the loss.

The taxpayer bears the burden of proving by a preponderance of evidence that a theft actually occurred.

@streben333 

[streben333]

Thank you, Does it put me in a higher audit risk by making this claim? Or set off any red flags? 

[PattiF]

No, this does not place you at a higher risk for an audit by reporting what happened to you. Unfortunately, theft occurs often enough that the IRS has seen these losses before. The loss that you are reporting is a reasonable amount and will not set off any red flags.