Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

how can I deduct a loss on my home from mold where we had to

rebuild ie Ed MvMahon. Will...
how can I deduct a loss on my home from mold where we had to rebuild ie Ed MvMahon. Will supply more info, but need casualty loss to deduct and offset income. Insurance company used a clause under secondary damage from water damage to cover us as mold directly had too restrictive of limits in policy. Discovered after change of A/C. Sued A/Ccompany and won back some of loss and money for health. We were out of our hoouse for 5 years and loss far exceeded what we received. My Tax man giving me a pain to classify as casualty loss due to mold. Maybe what Ed McMahon did or what occured in ST Louis causing mold which I belive is allowed underf special clause from Congress or President Bush at time. Can email me for more facts, wsilling to talk on phone and pay more for successful answer, and outcome. This is old info to me, need a way to qualify loss to deduct all at once not over time. you can email me [email protected]
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 hours by:
6/22/2009
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,150
Experience: Taxes, Immigration, Labor Relations
Verified

A casualty does not include normal wear and tear or progressive deterioration from age or termite damage. The damage must be caused by a sudden, unexpected, or unusual event (e.g., car accident, fire, earthquake, flood, vandalism).

 

Loss of property due to progressive deterioration is not deductible as a casualty loss.

According to the IRS publication 547 - http://www.irs.gov/pub/irs-pdf/p547.pdf - damage from mold is generally considered as progressive deterioration and as such may not be deductible as a casualty loss.

 

Settlements in a mold lawsuit filed by Ed McMahon is for failing to adequately handle remediation of mold in their Los Angeles home - see some details here - http://www.imakenews.com/pureaircontrols/e_article000154071.cfm - that settlement has nothing to do with tax treatment. Settlement amount

 

Some additional information....

According to IRS Private Letter RulingNNN-NN-NNNN- http://www.irs.gov/pub/irs-wd/0607003.pdf - the tax treatment of the cost that increases the useful life of a building, add value to it or adapt it to a different use must be capitalized and depreciated over the applicable period prescribed by the Internal Revenue Code.

In PLRNNN-NN-NNNN the IRS determined that the cost of mold removal did none of these things; it merely kept the building serviceable - so the IRS permitted the cost to be deducted in the year incurred by the taxpayer. The ruling did state that it was presumed that none of the mold had been present at the time the taxpayer purchased the property - assuming otherwise - the mold remediation may have been treated as a part of the purchase cost.

 

Please be aware that

  • the IRS Private Letter Ruling covers only specific situation and specific taxpayer and may not be applied to all other situation (but as a practical matter it serve as an example - not as a law)
  • in this specific situation the cost of mold removal should be deducted on the schedule C (for property used in business) or schedule E (for rental property)
  • this would not apply to the costs of mold removal in your home, which is a personal use property with respect to which maintenance costs are not deductible for income tax purposes.

you may be able to treat the cost of mold removal for personal use property as causality loss - but that issue is not addressed in this PLR

While the mold itself is not a casual event - the cause of the mold - such as the damage of the pipe may be considered as a casual event - if so - all resulted damage may be treated as the casual loss and may be deducted as such.

 

A key factor to consider is whether the mold damage occurred as a direct result of a causal event - and there is a direct connection between the casualty event and the loss claimed.

 

If your property has to be torn down or rebuilt because of the mold damage - that is not a casual event, but

if your property has to be torn down or rebuilt because of broken pipe (that was a sudden, unexpected, or unusual event) - you may have a casualty loss deduction to the extent of expenses you paid for that were not reimbursed by insurance.

 

To determine the casual loss you will need before and after full appraisals by qualified experts to back the deduction.

If the large amount of money involved - you may consider to request a PLR from the IRS to back your deduction.

 

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,150
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,150
30,150 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Had a substantial casualty loss due to Sandy in 2012.
Had a substantial casualty loss due to Sandy in 2012. Claimed the loss on my tax return in 2013. Resulted in -$39000 in taxable income and zero tax for 2013. 1. Does the extra unused loss of this $390… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I inherited rental properties. I got an LLC set up using an
I inherited rental properties. I got an LLC set up using an EIN number with a property management who no longet works for me.Can I remove their EIN number? legalgems… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
How to report cancellation of debt on rental property?
I received a 1099-C for my rental property that I held for over 1 year. According to the worksheet provided in IRS Publication 4681 I was insolvent just prior to the debt being canceled. My question i… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
My question is about depreciation for rental property. My
Hello. My question is about depreciation for rental property. My rental property had no income during one year. In this case, since there was no income, I do not need to claim depreciation for that sa… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
32 satisfied customers
I got a 1099 A of a rental property with information on Box
I got a 1099 A of a rental property with information on Box 2 and Box 4 how do I report it on my tax… read more
Lev
Lev
Tax Advisor
30,150 satisfied customers
Would owning a second home that is used for rental property
Would owning a second home that is used for rental property income affect VA survivors benefits? Would SSDI income?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,473 satisfied customers
I have a rental property that required major repairs this
I have a rental property that required major repairs this year. The repairs minus deductible were covered by my insurance. Is the entire amount of repair an allowable expense or only the insurance ded… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Are you familiar with Capital Gain taxes on rental property?
Are you familiar with Capital Gain taxes on rental property? … read more
Lev
Lev
Tax Advisor
30,150 satisfied customers
I recently received a car as a payment for rental property
Hi, I recently received a car as a payment for rental property and I was wondering how the tax treatment would be … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I am a personal injury attorney doing a schedule c as we
I am a personal injury attorney doing a schedule c as we speak. . … read more
Lev
Lev
Tax Advisor
30,150 satisfied customers
My grandma has a rental property held personally since the
Hi Mark, My grandma has a rental property held personally since the year 2000. We want to transfer the house into an LLC. On the date the rental property is transferred into the LLC what is the holdin… read more
socrateaser
socrateaser
1,031 satisfied customers
If my Schedule E loss is disallowed for a rental property
If my Schedule E loss is disallowed for a rental property (due to income level), can I take the mortgage interest and real estate taxes paid on Schedule A instead of on Schedule E?The entire expense a… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
734 satisfied customers
Disposition of Rental Property. Rental property: Gross sale
Disposition of Rental Property.Rental property : Gross sale price: $600K Cost or Other Basis plus Selling Expenses: $300K Depreciation allowed or allowable: $100K (Form 4797 line 22)Adjustment: $300K … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
In Texas A & single females have several rental properties
In Texas A & B single females have several rental properties in joint tentancy with right of survivorship. The 1099 is under A's SSN. In 2015 rental income was filed under B's federal tax. IRS now all… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I bought a new rental property. Can I get any tax deductions
I bought a new rental property. Can I get any tax deductions for the money I spend to buy the property? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,473 satisfied customers
We are considering purchasing a rental property in Cape. My
we are considering purchasing a rental property in Cape Cod. My understanding to get the full tax advantage I am only allowed to stay in the property for 14 days. Is this the case even when the rental… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I would like clarification on the IRS tax deductions and a
I would like clarification on the IRS tax deductions and a rental property I purchased recently. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x