Can I Deduct Home Repairs From a Hail Storm on My Taxes?

Homeowners can't deduct costs that their insurance company reimbursed them for.

Homeowners can't deduct costs that their insurance company reimbursed them for.

Under normal circumstances, you can't deduct the cost of home repairs on your taxes. However, you may be able to deduct the costs of repairs due to a natural event that isn't covered by your homeowner's insurance. To take this deduction, you'll need to retain documentation of the damage and calculate your total loss. Even then, the entire amount of your loss isn't tax deductible.

Casualty Losses

The Internal Revenue Service refers to property damage from natural events as casualty losses. According to IRS publication 547, taxpayers can deduct the costs of property damage from an identifiable event that is "sudden, unexpected or unusual," which includes a hail storm. You must deduct casualty losses in the year that they occur. You cannot claim more than what you originally paid for the property, plus improvements, according to a column on the LearnVest website.

Proof of Loss

To claim a casualty loss deduction, the IRS requires that you show proof of loss. You need to be able to identify the hail storm that caused the loss and when it occurred. Be prepared to prove you were the property owner at the time, or at least contractually liable for the damage. The IRS doesn't want you deducting costs that insurance is planning to cover. You need to prove whether or not a reimbursement claim exists and show that there's no reasonable expectation that the claim will cover the entire cost. The IRS only allows you to deduct the difference between the total damage and what the insurance company won't cover.

Calculating the Loss

There are a couple of ways that you can calculate the value of the casualty loss. One option is to calculate how much it cost you to repair the property, using receipts, estimates and similar documentation. However, if you haven't made the repairs yet, or haven't restored your home to its previous condition, you can measure the loss as the decrease in fair market value due to the event. The IRS won't just take your word on your home's value -- it's best to work with an independent appraiser.

Adjusting For Limitations

There are limitations to how much of a casualty loss you can deduct. To calculate the deductible amount of your loss for the 2013 tax year, subtract 10 percent of your adjusted gross income from the total loss value. After that, subtract another $100 to calculate your final deductible loss. For example, say that you have $25,000 in losses that the insurance company won't cover, and your adjusted gross income is $50,000. Ten percent of your adjusted gross income is $5,000, less another $100 makes your deductible loss $19,900.

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