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.
See Also
Form 4684: Casualties and Theft: What it is, How it WorksBloomberg Tax IRCDeducting Disaster: Casualty And Theft LossesTax Write-Offs for Auto AccidentsNot 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 ofproperty for personal useorusedin performing services as an employeethat 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 forcasualty lossand select theJump tolink in the search results.
- Select Yes on theDid 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 theProperty Summaryscreen, you can enterany additional property losses by selecting Add a Property.
