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Help with a Federally Declared Natural Disaster Casualty Deduction

My home was recently hit by a tornado in 2023 and is a federally declared disaster area. I filed an insurance claim for the damage, but they have yet to fully reimburse my losses. When filling out the section 'Casualty & Theft' in TurboTax, it asks for Insurance Reimbursement amount.  I'm fighting with insurance so my payments to date are far off what we've claimed (We've gotten $35k, claimed $208k in damages). 

Does anyone know the proper process to handle this kind of situation when the disaster year doesn't line up with the insurance reimbursement year?  If I put in the info as it stands today (where I've received $35k out of $208k in losses), it adds $30k to my refund which seems wrong.  The IRS indicates to report reimbursements I “expect to receive” so if I was expecting to receive the full 208k in 2024, should I just report the disaster this year then match my 'expected' insurance reimbursement to my loss (i.e. $208k in expected reimbursement offsetting the $208k in losses), then adjust in 2024 as needed? Then in processing that adjustment in 2024, would I amend my 2023 taxes or just wait until I file my 2024 taxes?

 

Much appreciated!

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1 Reply
RobertB4444
Expert Alumni

Help with a Federally Declared Natural Disaster Casualty Deduction

If you know that you are going to get a further insurance reimbursement but have no idea how much then you should leave the disaster off of this year's taxes.  You should enter it into the year that you receive the final insurance payment and know the bottom line.  It's annoying to wait, I know, but that is the best way to handle it.

 

@Eroc1234 

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