My client suffered major flood damage in June 2024 to the first level of her personal residence.  The state issued funds to cover the repair costs that her insurance did not cover.   She received a 1099-MISC with an amount in box 3 Other Income.

The income is showing up on Sched 1 but how do I reduce this to zero using actual losses ? I've completed the casualty loss worksheet but because it is personal and not a Federally declared disaster area, it will not show up on the return and cannot link it to the Sched 1 amount.

Any suggestions ? thanks