Yes, you can claim a casualty loss on a car that had a blown engine. However, you will be subject to the $100 casualty floor and 10% of AGI requirement. That means you can't deduct the first $100 of loss and after that, only the amount of the loss exceeding 10% of your AGI can be deducted. You can deduct casualty
losses on Schedule A.
According to the IRS:
Deductible casualty losses can
result from a variety of causes such as car accidents, earthquakes, floods,
fire, hurricanes, or vandalism.
Casualties that are not deductible losses include progressive deterioration such as
termite or moth damage. Also the loss of a personal belonging, like a ring that
is dropped in the garbage disposal, is not deductible.
In TurboTax, jump to the entry area for casualty loss:
-
Open
your return.
(To do this, sign in to TurboTax and select the blue Take me to
my return button.)
- Search for "casualty
loss" and then click the "Jump to" link in the search
results.
- On the Casualties
and Thefts (or Stolen or
Damaged Items) screen,
select Yes.
- Answer the interview
questions describing your event.
- When you complete the event
and reach the Property Summary screen, you can enter any additional
property losses by selecting the Add a Property button.
Related Information:
