You claim full settlement amount because it paid off your obligation. You will show it as disposed of. If you received insurance proceeds, the amount received will be your "sales" amount.
If this vehicle was used in business you dispose of the property as if it was sold. Turbo Tax will ask if you still use this property for business and you follow the prompts at this point. You will be able dispose of vehicle and capture the reimbursement. Follow the steps below.
The best practice would be to dispose of the asset when you are no longer using it.
To do this in TurboTax,
- from the left menu, select Federal>
- Income & Expenses>
- Self-Employment Income & Expense click Revisit>
- Pick your business and click Edit>
- Scroll down to the expenses to Vehicle and click Edit
- On the Vehicle Summary, next to the vehicle, click Edit
- Check the box for I stopped using this vehicle in 2021.
Your stolen vehicle does not provide a deduction for a personal Casualty Loss. Form 4684 – Theft and Casualty Losses. For tax years 2018 through 2025, you can no longer claim casualty and theft losses on personal property as itemized deductions, unless your claim is caused by a federally declared disaster.
[Edited 3/23/2022 1:15 PM PST ]
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