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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
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my water main pipe between the street and my house was ...

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my water main pipe between the street and my house was discovered to be leaking last year. It was estimated to be leaking at a rate of over 2,000,000 gallons a year. The town I reside in required me to fix the problem at my own expense or they would shut the water off to my house at the street. Insurance would not cover the expense of fixing the problem. It ended up costing me approximately $6,500 to replace the entire line since nobody from the town nor a private water agency could locate the exact area where the buried pipe was leaking from. How can I deduct this or handle this loss on my 2007 tax return?
Submitted: 8 years ago.
Category: Tax
Expert:  Wendy Reed replied 8 years ago.

Hello there,

The only deduction that you might have would be casualty loss, and unfortunately, this situation does not seem to fit the definition of casualty. You had to repair the water pipe, but this was the result of a leak. A casualty be defined is a sudden, unexpected, and unusual event. A leak is not a sudden event. If you had non-reiumbursed damage to your property that was caused by fire, flood, earthquake, hurricane, etc. then this would be a casualty for tax purposes. Since the cause, the timing, and the source of the leak are unidentified, the IRS would not allow this as a casualty deduction.

I realize that this is not the answer you are looking for, but unfortunately it is a nondeductible personal loss. Here are some references for you:

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