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Can you claim deduction roofing repairs damaged by wind under disaster

Do I claim decutions under disaster or home repair
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4 Replies

Can you claim deduction roofing repairs damaged by wind under disaster

A casualty loss on a personal residence is not deductible on a federal tax return unless the loss occurred in a federally declared disaster area.

Repairs to a personal residence is not deductible.

If the roof was replaced then that would be an improvement to the property and the cost would be added to the basis of the home when it is sold.

rjs
Level 15
Level 15

Can you claim deduction roofing repairs damaged by wind under disaster

You can search on the FEMA web site to see if the storm that damaged your roof was a federally declared disaster.

 

Can you claim deduction roofing repairs damaged by wind under disaster

To add to @rjs thread. if it was in a federal declared disaster area. you take the loss by completing section A of form 4684. read the instructions

https://www.irs.gov/pub/irs-pdf/i4684.pdf 

Can you claim deduction roofing repairs damaged by wind under disaster

First, casualty losses are only deductible if the loss was due to a federally declared disaster.  (Large regional storms may be, smaller local storms are probably not federal disasters.)

 

Then second, the amount of loss you can deduct is technically not the cost of repairs, but the loss of market value to the home.  You can use the cost of repairs as a fair estimate of the loss of market value, but only if the repairs restore the property to as-was condition.  If you lost a 25 year old roof, and replaced it with a brand new roof, the cost of the restoration will be more than the loss in value due to the loss of the old roof.

 

Then third, you can't claim any amount that was covered insurance, and you can't claim amounts that would have been covered by insurance but you decided not to submit a claim.

 

Then fourth, you must adjust the cost basis of your home, which may result in additional capital gains tax when you sell.  For example, suppose you have a farmhouse with a barn, that cost $500,000.  The ban is destroyed and you don't replace it.  You claim a loss of $200,000 for the barn.  Whenever you sell the property, you must reduce your cost basis by the deducted loss, in this example your cost basis will be $300,000 instead of $500,000, which may result in paying more capital gains tax on the sale. 

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