Yes, potentially, but only if you meet a certain threshold and you itemize.
Here is how casualty losses work: Individuals are required to claim their casualty and theft losses as an itemized deduction on Form 1040, Schedule A Itemized Deductions.
- For property held by you for personal use, Subtract any salvage value (zero for theft) and any insurance or other reimbursements from the loss amount.
- Then, subtract $100 from each casualty or theft event that occurred during the year.
- Then, take that amount and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.
- That's the amount that goes on your Schedule A Itemized Deductions.
If your property is personal-use property or is not completely destroyed, the amount of your casualty loss is the lesser of:
- The adjusted basis of your property, or
- The decrease in fair market value of your property as a result of the casualty
More details can be found at this link http://www.irs.gov/taxtopics/tc515.html
You must file itemize deductions and file a Schedule A as I stated above. But, if you want to give it a shot in the Casualty and Theft section of the software, it wouldn't hurt.
How to enter it into TurboTax: While inside the software and working on your return, type casualty loss in the Search at the top of the screen (you may see a magnifying glass there). There will be a popup that says Jump to casualty loss. Select that to get to the general area.
