Casualty Losses – October Winter Storm/Tornado Damage 2011 Tree Damage
I have been getting a number of questions asking about tree damage and whether these costs are eligible for a casualty loss deduction. The simple answer is “Maybe”.
The cost to clean up and remove damage would be deductible if not reimbursed by insurance.
Replacement costs would be covered to bring the property back to its original state as long as the costs were not excessive.
An alternative to this “Replacement Cost” approach would be to determine if the fair market value of the real estate in total was reduced. This probably would require an a appraiser to review the property both before and after as well as document his opinion in order to pass muster with the IRS.
Costs would be deductible once they a)exceed insurance proceeds, b) exceed $100 per event and c) exceed 10% of AGI ( adjusted gross income) for individual taxpayers.
Please keep the questions coming.
