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moe174
New Member

If I lost $5000.00 as a down payment when we bought a new car and totaled it,can i take it as a loss ?

 
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Hal_Al
Level 15

If I lost $5000.00 as a down payment when we bought a new car and totaled it,can i take it as a loss ?

No. At least, not exactly. A taxpayer seldom has a net tax deductible casualty loss, in a car accident, where insurance is involved. Your loss is the fair market ("blue book") value of the car on the date of the accident. 

To claim a tax deductible casualty loss you must not only subtract what the  insurance company paid, you can only deduct your losses that exceed 10% of your AGI+$100. In addition, it is an itemized deduction. If you usually take the standard deduction, you'll have to now find additional itemized deductions to exceed the standard deduction. 

In TurboTax, enter at:

Federal Taxes Tab 

Deductions & Credits

  -Scroll down to:

   --Other deductions & Credits

     ---Casualty & theft

Or type- casualty loss -in the search box

For more info, see:

http://www.irs.gov/pub/irs-pdf/i4684.pdf


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1 Reply
Hal_Al
Level 15

If I lost $5000.00 as a down payment when we bought a new car and totaled it,can i take it as a loss ?

No. At least, not exactly. A taxpayer seldom has a net tax deductible casualty loss, in a car accident, where insurance is involved. Your loss is the fair market ("blue book") value of the car on the date of the accident. 

To claim a tax deductible casualty loss you must not only subtract what the  insurance company paid, you can only deduct your losses that exceed 10% of your AGI+$100. In addition, it is an itemized deduction. If you usually take the standard deduction, you'll have to now find additional itemized deductions to exceed the standard deduction. 

In TurboTax, enter at:

Federal Taxes Tab 

Deductions & Credits

  -Scroll down to:

   --Other deductions & Credits

     ---Casualty & theft

Or type- casualty loss -in the search box

For more info, see:

http://www.irs.gov/pub/irs-pdf/i4684.pdf


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