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Loss due to casualty or theft does allow you to dispose of the car with no gain. Your basis in the replacement property is its cost minus any gain that isn’t recognized. See Pub. 547 for more information.
When you enter that you disposed of the vehicle, you will need to enter a false sales price. Enter a sales price so that you have no gain or loss.
Interesting way to do it, but I will try that.
Should I enter a Casualty of Theft later under the Personal Deductions which allows you to enter business losses or should I leave that alone.
Only if you had enough loss to matter. You have money from insurance reimbursement so you may not even have had a loss to put on your taxes. If you did, it would add to your itemized deductions, if you itemize. So, probably not anything to do but worth checking.
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