The Internal Revenue Service (IRS) has announced that it will be providing a tax break for Chinese drywall victims, which will allow homeowners to make a deduction for the cost of repairs and damaged appliances. The deduction will be considered a “casualty loss,” which is a claim usually made by those affected by events such as natural disasters.
The tax break will provide some relief to those who have deicded to repair their homes on their own, however their are some restrictions:
- a deduction is allowed only if the amount exceeds $500
- deductions are allowed on amounts that exceed 10% of the taxpayers adjusted gross incomes
- if you do not have a claim or a pending claim for reimbursement through property insurace, litigation, or some other source, you may claim the full tax break
- if you do have a pending claim, you are eligible to claim a loss for 75% of the unreimbursed amount paid for damages