Hey All,
Last year in my rental property I had tennants who completely destroyed the place. From water damage to plumbing, to the walls, etc…
The insurance didn’t cover all of the repairs and I’ve been losing money and spending lots of money to fix it back up.
Can I claim the catistropic loss deduction in my taxes?
I would say put it in there…if it gets rejected it gets rejected.
I’m not an atty, but as long as it is not illegal to do so, I dont see the harm in trying to recoop your losses. Have you tried calling a tax service to check if they have ever filed a claim like this on someone else’s behalf?
If you filed an insurance claim, you can take a casualty loss (form 4384). File a police report, if you still can.
You are allowed to deduct the unreimbursed cost of repairs for your rental property on your Schedule E anyway.
Use the catastrophic loss deduction when your primary residence is involved and insurance does not cover the claim.
my read is that significant repairs would be considered a renovation to be capitalized.
The loss for the undepreciated FMV of the original property should be taken on 4684.
I guess the approach depends on the significance of the damage/repairs.