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Mold casuality loss

collins1227 — Tue, 04 Jun 2019 00:19:18 GMT

We recently found out due to a leak in our roof that a big storm a month before ripped shingles off our house. The water ran down to bathroom and kitchen. My wife and daughter started coughing a few weeks before we put our claim in with insurance. The remediation cost 45k and we had to throw away most of our belongings due to my wife and daughter being allergic. It was not a specific hurricane that caused this but our area had 50-60mph winds a few weeks before the leak was discovered. Will this be suitable to claim as a loss casuaslity since it was declared by insurance as water damage? We sustained a loss over 89K?

two different CPA's in our area gave us two completely different answers.

If you suffered damage to your home or personal property...

Lisa995 — Tue, 04 Jun 2019 00:19:20 GMT

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return.

For 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President.

Yes I am aware of that but was more into being able to cl...

collins1227 — Tue, 04 Jun 2019 00:19:22 GMT

Yes I am aware of that but was more into being able to claim mold part. How can I prove it wasn't part of normal wear on a home or deteriation? How do you prove it was sudden?

I go with no since it doesn't meet the definition of a ca...

Critter — Tue, 04 Jun 2019 00:19:23 GMT

I go with no since it doesn't meet the definition of a casualty loss ... and especially if this is in 2018 due to the new tax law changes where it has to be in a federally declared disaster area.

A casualty loss is a type of tax loss that is a sudden, unexpected, or unusual event. Damage or loss resulting from progressive deterioration of property through a steadily operating cause would not be a casualty loss. “Other casualty” are events similar to “fire, storm, or shipwreck.”

Casualty loss - Wikipedia

https://en.wikipedia.org/wiki/Casualty_loss

the loss occurred in 2017. I have extended my taxes for...

collins1227 — Tue, 04 Jun 2019 00:19:25 GMT

the loss occurred in 2017. I have extended my taxes for this purpose

the loss was sudden. a month passed it leaked in kitchen....

collins1227 — Tue, 04 Jun 2019 00:19:26 GMT

the loss was sudden. a month passed it leaked in kitchen. My wife and daughter severly allergic and never had issues in the 7 years we lived here.

The roof damage was sudden and may be considered a casual...

Critter — Tue, 04 Jun 2019 00:19:29 GMT

The roof damage was sudden and may be considered a casualty loss subject to the regular loss limitations ... however your failure to fix the roof caused the mold which was very expected due to the leak in the roof... so no to the mold remediation as a casualty loss.

Also see this IRS website - https://www.irs.gov/businesses/small-businesses-self-employed/faqs-for-disaster-victims-casualty-loss-valuations-and-sections-165-i">https://www.irs.gov/businesses/small-businesses-self-employed/faqs-for-disaster-victims-casualty-loss-valuations-and-sections-165-i</a>

"(6/1/07) Q: How will the IRS will handle water damage "mold issues" as a result of insufficient repairs or whatever the cause. Will there be special reporting on the loss related to mold?

A: Whether individuals may claim damage to their personal-use property from mold as part of a casualty loss depends on the facts and circumstances of each situation. A key factor to consider is whether the mold damage occurred as a direct result of the disaster or from some other intervening cause since there must be a causal connection between the casualty event and the loss claimed by the taxpayer. For example, individuals would not be entitled to deduct as part of their casualty loss mold damage that occurred as a result of insufficient repairs. The individuals’ casualty loss deduction would be limited to the property damage caused by the disaster. In addition, if a large amount of time lapsed between the date of the hurricanes and the formation of the mold, this raises the question of whether the mold damage was caused by the disaster or by some other factor.

The formation of mold may qualify as a separate casualty. A casualty is an event that is identifiable, damaging to property, and sudden, unexpected, and unusual in nature. An event is sudden if it is swift and precipitous, and not gradual or due to progressive deterioration of property through a steadily operating cause. An event is unexpected if it is unanticipated and it occurs without the intent of the one who suffers the loss. An event is unusual if it is extraordinary and nonrecurring, one that does not commonly occur during the activity in which the taxpayer was engaged when the destruction or damage occurred and one that does not commonly occur in the ordinary course of day-to-day living of the taxpayer. If, under a particular set of facts, the formation of mold is a sudden, unexpected, unusual and identifiable event that caused damage to the individual’s property, then it would qualify as a casualty and the individual may be entitled to deduct the loss for the resulting property damage as a casualty loss under section 165(c)(3) if the individual satisfies the other requirements for the deduction."

Bottom line ... if you choose to claim the deduction be p...

Critter — Tue, 04 Jun 2019 00:19:33 GMT

Bottom line ... if you choose to claim the deduction be prepared to support your claim when the IRS audits the return.