That depends on how much the 5% is. You can deduct the loss, however, the 5% deductible would be further reduced by a $100 reduction per casualty.
Will the loss affect your return? That depends on whether or not you itemize your deductions.
The loss will be calculated as the difference between the Fair Market Value of the property that was damaged before the hurricane and the Fair Market Value after the hurricane. The Fair Market Value is what you could have sold the property for at those times.
If your losses are due to the 2017 hurricanes, click yes when asked if you were affected by them at the end of the personal information input process. (See the screenshot below) If you answer yes to this question, the Casualties and Theft Loss will show up automatically under the Deductions and Credits tab. (See the second screenshot below)
If you were not affected by the 2017 hurricanes or missed that question, click on the search box in the upper right corner. Type in “Casualty Loss” and click on the magnifying glass. You should see a “Jump to” link as the first option. Click on the Jump to link. (See the third screenshot below.)
- You will be asked for a description of the Casualty
- the date it happened
- the property type (Personal property or Income-producing).
- a description of the property,
- the date acquired,
- the cost of the property and
- insurance reimbursement (which in your case would be $0.
- On the next screen, you will be asked what the property was worth just before the hurricane and immediately after.
Per the IRS link found here, "you must figure the loss on each item separately" if more than one item was damaged. Then combine the losses to determine the total loss from that casualty or theft.”
You can enter each item in Turbo Tax. (See the fourth screenshot)
You can find additional information about the Casualty Loss Deduction by clicking here
IF you do not itemize, you may want to wait to file your return. Part of The Bipartisan Budget Act of 2018 includes retroactive tax relief for victims of Hurricanes Harvey, Irma and Maria. The IRS is currently reviewing the law changes. We cannot make changes to the tax program until after they have determined the changes to be made. Please read the additional information below:
https://ttlc.intuit.com/replies/6585982
