When you have items that are lost or damaged as a direct result of a natural disaster, and you live in a federally declared disaster area , you may be able to take a tax deduction for the value of the property that is not covered by your insurance.
The lost or damaged items can be personal property, business property or investment property.
Not eligible for the deduction:
- Property with progressive deterioration such as termite or moth damage.
- Stolen items.
- Accidental losses of personal items, such as a ring dropped down the sink.
- Property loss or damage that’s not the direct result of a natural disaster as described above. (This restriction started in 2018 and applies through 2025.)
|The deduction for personal casualty or theft losses has been suspended (eliminated) through tax year 2025, unless the loss occurred in a federally-declared disaster area and was directly caused by the disaster.||You can deduct uninsured losses exceeding $100 due to fire, theft, or natural disaster if your total loss amounts to more than 10% of your AGI.|
In TurboTax, jump to the entry area for casualty loss:
- Open your return.(To do this, sign in to TurboTax and select the Take me to my return button.)
- Search for casualty loss and then click the "Jump to" link in the search results.
- On the Damaged or stolen screen, select Yes.
- Answer the interview questions describing your event.
When you complete the event and reach the Property Summary screen, you can enter any additional property losses by selecting the Add a Property button.