Just had a call from a prospective client. Apparently there were two trees on his property that were also on the edge of another property. The trees were damaged in a storm and both owners agreed that the trees needed to come down. They also agreed on a split of the costs with prospective client paying much more because the trees were mostly on his property.
Now the client is part owner of an S Corp that has its headquarters in the upstairs room that is where the trees would have hit if they had hit any part of his house. (By the way, there are no pictures and I didn't see the trees after the storm damage but I am familiar with the property and I would have to agree that the roof above the home office is the only place on the house they could have hit.) The taxpayer did not qualify to claim a tax deduction for the home office last year because there was no plan, accountable or otherwise, set up with the S Corp.
So the question is whether he has a casualty loss at all and whether it is business or personal. Any thoughts? The amount in question is approximately $2600 and total income for 08 could easily exceed 70K so we would expect to be in territory where it takes at least the destruction of an expensive vehicle to create a tax saving personal casualty.
Now the client is part owner of an S Corp that has its headquarters in the upstairs room that is where the trees would have hit if they had hit any part of his house. (By the way, there are no pictures and I didn't see the trees after the storm damage but I am familiar with the property and I would have to agree that the roof above the home office is the only place on the house they could have hit.) The taxpayer did not qualify to claim a tax deduction for the home office last year because there was no plan, accountable or otherwise, set up with the S Corp.
So the question is whether he has a casualty loss at all and whether it is business or personal. Any thoughts? The amount in question is approximately $2600 and total income for 08 could easily exceed 70K so we would expect to be in territory where it takes at least the destruction of an expensive vehicle to create a tax saving personal casualty.