You can report a casualty loss on Schedule A if your motor was destroyed due to an accident, theft, or act of nature and you were not reimbursed by your insurance or government agency. The lost item can be business property, investment property, or personal property.
Deductible casualty losses can result from a variety of causes such as car accidents, earthquakes, floods, fire, hurricanes, or vandalism.
There is a limitation, amounts up to 10% of AGI plus an additional $100 are not deductible unless you were in a federally declared disaster area:
- If you live in a location that was declared a federally designated disaster area in 2016 or 2017: You can still deduct casualty losses on Schedule A, as well as take advantage of special relief, such as extended tax deadlines. In addition, due to tax reform:
- Everything after the first $500 of loss is now tax deductible. The requirement that losses must equal 10% of adjusted gross income (AGI) has been waived.
- The 10% early withdrawal tax for retirement accounts is now waived for amounts up to $100,000. (Talk to your plan administrator for details.)
- You can also take a casualty loss deduction even if you didn’t itemize
To enter a casualty loss:
In TurboTax, jump to the entry area for casualty loss:
(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.