To enter them in TurboTax see below. You will have to determine the FMV before the event that caused the loss. If it was a total loss the FMV afterwards is $0, of course. If you are in a federally declared disaster area you do not need to itemize to deduct your casualty loss and everything after the first
$500 of loss is tax deductible. The requirement that losses must equal
10% of adjusted gross income (AGI) has been waived.
In TurboTax, jump to the entry area for casualty loss:
- Enter casualty
loss in the TurboTax search box and press the Enter key.
- Click on Jump to
- On the Stolen or Damaged
Items screen, click Yes.
- Answer the interview
questions describing your event.
- When finished at
the Property Summary screen,
Enter any additional property losses by clicking the Add a
Property button
"Section 1.165-7(b)(1)(i) indicates the decrease in fair market value is the difference between the property’s value immediately before and immediately after the casualty. To compute the deductible casualty loss, taxpayers need to determine: (1) the difference between the fair market value immediately before and immediately after the casualty; and (2) the adjusted basis of the property (usually the cost of the property and improvements). Taxpayers may deduct the smaller of these two amounts minus insurance or any other form of compensation received or expected to be received." Click here to read more: FAQs for Disaster Victims - Casualty
Loss (Valuations and Sections 165 (i))
