Is this tax deductible?

[Dennis885]

I'm posting this here because I haven't an answer yet, without paying $30. So hopefully someone can help..

I'm a college student living in university owned housing. In late September I accidentally broke off a sprinkler head in a university owned apartment. Public safety came along with a gentlemen from the sprinkler company. He replaced the sprinkler head and reset the sprinkler system for the complex. The total for this, which I was responsible for, was $755.08.

I doubt it, but a friend put the idea in my head to ask. Is there any way this would be considered tax deductible or a write-off? I have a copy of the bill as well as my receipt of payment.

Thank you.

Dennis

[dsi]

Dennis, this seems to be a personal expense, and as such is not deductible.

[thomtax]

I would agree with David. I don't see how this could be anything other than a personal expense, the same as if you had a plumber come to your home.

LT

[erchess]

Another Point

Why does the young man not have a personal casualty subject to the normal restrictions?

I realize that he may not have taxable income and probably does not itemize his deductions and can't get over the $100 and 10% of AGI thresholds. But it does seem to me that his accidental break of the sprinkler head would qualify.

[solomon]

Agree with erchess. It was sudden, unusual, and unexpected. Although he is not the owner of the property, he is ostensibly contractually liable.

[BOB W]

Good luck on being able to itemize???????????

He will get no tax benefit............................

[Uncle Sam]

Is this tax deductible

This is what irks me about this board.
A totally clear fact situation is stretched out in tangents.
Forgetting the itemized threshold issues - this event is not, and I cannot see how it can be, considered a "casualty".
The mere repair of a pipe replacement that doesn't change the value or usage of the building is a non tax deductible issue - pure and simple.
Stop reading into the facts what is not there simply to belabor the point and stretch the imagination.

[Bees Knees]

This is what irks me about this board.
A totally clear fact situation is stretched out in tangents.

Some of us enjoy talking taxes and tax theory with others. That is what makes this board interesting to me. There is never a clear fact situation answer to any tax question. If the kid accidentally busted the natural gas line instead of a sprinkler head, the gas line blew up the science building, and the bill came to $755,080 instead of $755.08, then would it be a casualty loss?

Doesn't that kind of tweak your interest...just a little???

It could happen.

[Uncle Sam]

Is this tax deductible?

Yes it would Bees - but the facts presented DIDN'T POSE the facts you CREATED.

[BOB W]

I have tried to do some research on this type of loss but could not find what I was looking for, but I believe casualty losses can only be claimed by the owner of the property. Can someone help me on this?

[Bees Knees]

I have tried to do some research on this type of loss but could not find what I was looking for, but I believe casualty losses can only be claimed by the owner of the property. Can someone help me on this?

Section 165(b) says the basis used to determine the loss is the adjusted basis as defined in Section 1011.

In other words, you have to have a cost basis in the property in order to deduct any loss due to casualty or theft. Without any basis, there is no tax loss.

Being liable for an expense due to you damaging someone else's property is not a casualty loss because you have no tax basis in the other person's property.

[BOB W]

Section 165(b) says the basis used to determine the loss is the adjusted basis as defined in Section 1011.

In other words, you have to have a cost basis in the property in order to deduct any loss due to casualty or theft. Without any basis, there is no tax loss.

Being liable for an expense due to you damaging someone else's property is not a casualty loss because you have no tax basis in the other person's property.

Thanks Bees, what I read seemed to assume it was the owner without saying so. While your find didn't say owner, it said "basis" which would assume only an owner could have basis.

[Bees Knees]

The basis rule is described in TTB, page 4-21, which says:

A casualty or theft loss is the lesser of the basis in the property
damaged or destroyed, or the reduction in FMV of the property
due to the casualty or theft. From this amount, subtract insurance
or other reimbursements received or that could have been received
if the taxpayer chose not to file an insurance claim for the
loss. Nonbusiness property losses are further reduced by $100 for
each casualty or theft loss. Multiple items lost in a single event result
in only one $100 reduction. The total of all nonbusiness casualty
and theft losses are further reduced by 10% of AGI after the
$100 per event reduction. Losses on property used in performing
services as an employee are treated as job expenses and added to
other miscellaneous itemized deductions, subject to the 2% AGI
limitation.

So in other words, the casualty could have done a million dollars worth of damage to your condo in Florida, but if you only paid $10,000 for it back in 1968, $10,000 is the most you can deduct for a casualty loss. If you didn't pay anything for it, such as a sprinkler head owned by the University, your basis is zero. No loss deduction allowed.

[BOB W]

The basis rule is described in TTB, page 4-21, which says:

A casualty or theft loss is the lesser of the basis in the property
damaged or destroyed, or the reduction in FMV of the property
due to the casualty or theft. From this amount, subtract insurance
or other reimbursements received or that could have been received
if the taxpayer chose not to file an insurance claim for the
loss. Nonbusiness property losses are further reduced by $100 for
each casualty or theft loss. Multiple items lost in a single event result
in only one $100 reduction. The total of all nonbusiness casualty
and theft losses are further reduced by 10% of AGI after the
$100 per event reduction. Losses on property used in performing
services as an employee are treated as job expenses and added to
other miscellaneous itemized deductions, subject to the 2% AGI
limitation.

So in other words, the casualty could have done a million dollars worth of damage to your condo in Florida, but if you only paid $10,000 for it back in 1968, $10,000 is the most you can deduct for a casualty loss. If you didn't pay anything for it, such as a sprinkler head owned by the University, your basis is zero. No loss deduction allowed.

Wow !!!!! That problem seldom comes around and I never really considered it in the past but it is something to keep in mind because it can happen (and that is scary). (low basis)

[solomon]

Per 2006 Pub 17: Among other records for proof of loss - "That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage." Same language in Pub. 547.

In other words, ownership is not required if there is contractual liability with leased property.