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

by TurboTax• Updated 2 weeks ago

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 isn't the direct result of a natural disaster as described previously (this restriction started in 2018 and applies through 2025)

Enter your qualified casualty loss

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

Open or continue your return.
Search for casualty loss and select the Jump to link in the search results.
Select Yes on the Did you have anything damaged or stolen in 2023? screen.
Answer the questions about your event, entering 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 Add a Property.