deductible loss?

[mblatour]

Client had severe (their opinion) hail damage to the roof of their house and garage last year. Many of the neighbor's roofs were replaced by the insurance companies. Client's insurance company inspected their 2 roofs and decided they only needed some repairs, not full replacements. Total cost $1079. Client had $1000 deductible. They got a check for $79. Client decided awhile later that they just didn't want to take any chances. Their roofs were 14 years old and they felt there were just too many dent/pock marks in them, which risked a future leak. Client then paid to have both roofs completely replaced.

Is there any way this could be a casualty loss/deductible?

Thanks in advance guys!

[erchess]

If they get audited

they will need evidence that the damage was as great as they claim. For example an expert appraisal or very clear photographs would do nicely. Since they probably don't have either I would tell them it is best not to try to deduct. They can add it to their basis in the property of course, but under current rules that is likely to be a moot point.

[mblatour]

Erchess...

nothing for the $1000 deductible either?

[Jesse]

nothing for the $1000 deductible either?

Does the $1,000 exceed the 10% of AGI floor for deductible casualty & loss deduction?

[erchess]

oops

Yes I think the 1K deductible would indeed be a legitimate personal casualty. However, personal casualties are usually not helpful because you first deduct $100 from each one and then you deduct ten percent of agi from the aggregate. What's left goes on Sch A if the taxpayer can itemize.

All in all I remember only one client who got significant tax savings from a personal casualty. This individual lost a house trailer, a dock, and a boat in Hurricane Fran.

[mblatour]

Thanks guys....

they'll get ZIP then. Their AGI is over $100K. Thought I'd check!