Taxes and Mold-from Jan

[Guest guest]

From: <brianc8452@...>

Subject: Re: [] Taxes and Mold

Date: Saturday, January 19, 2008, 1:08 PM

From www.irs.gov

http://www.irs.gov/businesses/small/article/0,,id=171138,00.html

(6/1/07) Q: How will the IRS will handle water damage " mold issues "

as a result of insufficient repairs or whatever the cause. Will there be special

reporting on the loss related to mold?

A: Whether individuals may claim damage to their personal-use property from

mold as part of a casualty loss depends on the facts and circumstances of each

situation. A key factor to consider is whether the mold damage occurred as a

direct result of the disaster or from some other intervening cause since there

must be a causal connection between the casualty event and the loss claimed by

the taxpayer. For example, individuals would not be entitled to deduct as part

of their casualty loss mold damage that occurred as a result of insufficient

repairs. The individuals¢ casualty loss deduction would be limited to the

property damage caused by the disaster. In addition, if a large amount of time

lapsed between the date of the hurricanes and the formation of the mold, this

raises the question of whether the mold damage was caused by the disaster or by

some other factor.

The formation of mold may qualify as a separate casualty. A casualty is an

event that is identifiable, damaging to property, and sudden, unexpected, and

unusual in nature. An event is sudden if it is swift and precipitous, and not

gradual or due to progressive deterioration of property through a steadily

operating cause.. An event is unexpected if it is unanticipated and it occurs

without the intent of the one who suffers the loss. An event is unusual if it

is extraordinary and nonrecurring, one that does not commonly occur during the

activity in which the taxpayer was engaged when the destruction or damage

occurred and one that does not commonly occur in the ordinary course of

day-to-day living of the taxpayer. If, under a particular set of facts, the

formation of mold is a sudden, unexpected, unusual and identifiable event that

caused damage to the individual¢s property, then it would qualify as a casualty

and the individual may be entitled to

deduct the loss for the resulting property damage as a casualty loss under

section 165©(3) if the individual satisfies the other requirements for the

deduction.

[] Taxes and Mold

I started back to work to learn a profession I can do at home as my

home is not the source of mold exposure for me. I decided to start

doing taxes and then start a bookkeeping business that does taxes for

small businesses.

Anyway mold losses are NOT tax deductable and futhermore making your

house airtight is deductable. One might conclude that our tax code

promotes mold growth. LOL but not very funny.

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