Casaulty Loss

[TRANQUILLA]

I live in SW Florida. Hurricane Ian caused $6900 worth of damage to my house. My deductible is greater than that amount so I get no reimbursement. Is this casualty loss entered on my deductibles schedule? Since I don't have enough deductibles to match the Standard Deduction, does that mean the casualty loss doesn't help me?

I also own a rental property in the same area. I already have an assessment of $12,500 for repairs with more to come. Can I use this as an expense offsetting rental income? If I make more than $125,000, I cannot deduct any loss against my income.  Do I lose that casualty loss as well?

[Loretta P]

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's not covered by your insurance.   What if I have property that was lost or damaged (a casualty loss)? 

This article outlines what tax relief is available and who would qualify.  Tax Benefits Available for Victims of Natural Disaster   You can claim casualty loss in the tax year it occurs or the previous tax year (which allows you to reap the tax benefit sooner). For example, if you suffered a casualty from a  recent natural disaster, you can claim it on your 2022 taxes or on your tax year 2021  taxes. The deadline for choosing which tax year to claim your casualty loss is generally the due date of your current-year return. If you’ve already filed your 2021  taxes, you can claim your loss by filing an amended tax return. You can use TurboTax to amend your tax return on Form 1040X, writing “Disaster” in red at the top of the tax return and the name of your city, county or state that was declared a disaster area.

If you take deductions on your rental property for depreciation or casualty losses, you reduce your basis.

Rental property casualty loss due to fire and capital gains 

Publication 551 

When your rental losses are limited by your income, you are incurring a net operating loss (NOL).  The NOL is carried forward until you are under the income limit or until you sell the property.  You can't take those losses until the year you sell or otherwise dispose of the property. You'll see those carry over losses on IRS Form 8582 line 1d.

Why can't I deduct rental loss 

Selling Rental Real Estate at a Loss 

[markz12345]

I submitted an amended return for 2019 with form 4684 for a Federal disaster.  The amount of the loss was $477,070 but I could only use $79,500 for that year.  I now need to file an amended return for 2020 with the carry forward 397,570.  However because it is an amended return Turbo Tax did not carry it over and I am having trouble with where to enter the loss.

[PattiF]

According to IRS Tax Topic 515, if your casualty loss exceeds your income for the tax year, you have a Net Operating Loss Carryover. You don't need to be in business to have an NOL from a casualty. 

In TurboTax, this carryover is reported under Business Situation. Use one of the "jump to" shortcuts below to go to "NOL."

The easiest way to find any section of TurboTax for Desktop is to open your return and use the Search box at the top right side of the TurboTax header. Click on the magnifying glass, type in the topic you need, hit Enter, and click the "jump to" link to go directly to the beginning of that topic.

In TurboTax Online, go to Tax Tools in the left column >> Tools >> Topic Search. Type in your topic, then click the topic in the list and then GO to go directly to the start of that section.

@markz12345