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What if I have property that was lost or damaged (a casualty loss)?

SOLVEDby TurboTax1861Updated April 10, 2023

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.

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 of property for personal use or used in performing services as an employee that’s not the direct result of a natural disaster as described previously. (This restriction started in 2018 and applies through 2025)

In TurboTax, jump to the entry area for casualty loss:

  1. Open or continue your return in TurboTax
  2. Search for casualty loss and then click the Jump to link in the search results
  3. On the Casualties and Thefts screen, select Yes to the question Do you want to work on your 2022 casualties and thefts now?
  4. Answer the questions about your event
  5. Enter your Description in the following format: State, Disaster. For example, California, Wildfires

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.

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