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Timcurtis
New Member

Can I claim loss rental income if my investment property is in a disaster area?. Flint MI water crisis has made my property un-rentable.

I own a home in Flint MI .. As you may or may not know the City has a really bad problem with Lead in the water, and it has made it extremely difficult to rent a house that dosn,t have drinkable water. So will I be able to write off loss of rental income ? Please advise. I would also appreciate a little help on the loss of value because of this situation. Thanks for your help, much appreciated. - Timothy
1 Reply
bwa
Alumni
Alumni

Can I claim loss rental income if my investment property is in a disaster area?. Flint MI water crisis has made my property un-rentable.

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.






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