Where do you enter in the insurance proceeds for a business asset that was lost/destroyed? Turbo Tax never comes back to get the information.

Forum|Forum|3 years ago
April 1, 2023
1 reply
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I had a business asset being depreciated. It was destroyed two years into depreciation. I received insurance proceeds for the loss. I "Yes" indicated that it was lost or destroyed.

Turbo Tax says "If you disposed of this property by any of the above means, enter your sales information later in the interview under "Business Income/Sale of Business Property."

There is NO "Business Income / Sale of Business Property" topic or section. I have gone through it many times. There is just 1099-NEC, 1099 and other income. Nothing about sale of business property.

TurboTax Online

Best answer by MonikaK1

If your business property was destroyed due to a casualty, you can report the loss in the Casualty Loss section of TurboTax.

A casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. A casualty doesn't include normal wear and tear or progressive deterioration.

The requirements for each type of loss vary. For more information, see Publication 547 or refer to the Instructions for Form 4684.

To report the loss of business property due to a casualty in TurboTax Online:

Go to Deductions & Credits
Select Disasters, theft, and other property loss or damage
Click to add a casualty or theft
Fill in the Description of the event (e.g., "fire", "theft")
Fill in the date
Select Income-Producing Property as the Property Type
Choose "no" when asked if it was used in a passive activity (assuming it's used in your Schedule C business)
Enter the description of the property, date acquired, cost basis (for business property, your adjusted basis after depreciation), and any insurance reimbursement
Enter fair market value before and after the casualty (if lost due to theft, value after is 0)
Select "I used this property in my business"
Select Done

When you preview your return, look for the loss to appear on Form 4797.

See here for more information from the IRS on this topic.

MonikaK1Answer

If your business property was destroyed due to a casualty, you can report the loss in the Casualty Loss section of TurboTax.

The requirements for each type of loss vary. For more information, see Publication 547 or refer to the Instructions for Form 4684.

To report the loss of business property due to a casualty in TurboTax Online:

Go to Deductions & Credits
Select Disasters, theft, and other property loss or damage
Click to add a casualty or theft
Fill in the Description of the event (e.g., "fire", "theft")
Fill in the date
Select Income-Producing Property as the Property Type
Choose "no" when asked if it was used in a passive activity (assuming it's used in your Schedule C business)
Enter the description of the property, date acquired, cost basis (for business property, your adjusted basis after depreciation), and any insurance reimbursement
Enter fair market value before and after the casualty (if lost due to theft, value after is 0)
Select "I used this property in my business"
Select Done

When you preview your return, look for the loss to appear on Form 4797.

See here for more information from the IRS on this topic.

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Max DogAuthor

Thanks for the quick reply. I will check it out.

Max DogAuthor

This worked however it was more complicated. Turbo Tax also created asset sale form in addition to the loss. This double counted the loss. There is no easy access to the sale form in TurboTax and no way to delete a sale via main Turbo Tax screens. It had to be manually deleted which is a whole another endeavor in of itself.