So will I be able to write off loss of rental income ?
Unfortunately, no. You can't write off income you didn't receive. The tax benefit, if you call it that, is that you don't have to report it as income, either.
I would also appreciate a little help on the loss of value because of this situation.
To be able to deduct that it would need to be a casualty loss. Unfortunately, it doesn't qualify.
From
the IRS definition in Tax Topic 515:
"A casualty loss can result from the damage, destruction or loss of
your property from any sudden, unexpected, or unusual event such as a flood,
hurricane, tornado, fire, earthquake or even volcanic eruption. A casualty does
not include normal wear and tear or progressive deterioration. A theft is the
taking and removing of money or property with the intent to deprive the owner
of it. The taking must be illegal under the law of the state where it occurred
and it must have been done with criminal intent."
The loss would be deferred and claimed when the property is abandoned or sold.
