The Advocate is reporting that the federal $700 billion financial rescue bill has a provision for property owners suffering damage from hurricanes Gustav and Ike. The losses can be claimed on personal income taxes. Here's a break down of key components of the provision:
- All damages that exceed $500 can be claimed
- There is no consideration for adjusted gross income
- The provision will end in 2010
According to the Advocate, in previous years a property owner could only claim damages that exceeded 10 percent of their adjusted gross income minus $100.
Under the old law, a family with an adjusted income of $50,000 could only claim damages that exceed $4900. For an example, if your house had roof damages totaling $7000, you could claim $2100.
Now, under the new law, property owners would be able to claim a loss of $6500.
My advice
For tax purposes:
- When in doubt, seek advice from a tax consultant
- As with any tax, I would advise that property owners keep good records and receipts for any repairs that are done.
- Take pictures of all damage and maintain them in a safe place.
For repairs purposes:
- Get references from friends and use the most reputable ones.
- Use licensed and bonded repairmen
This is not intended to be a comprehensive list of advice, I just want to get you started in the right direction for purposes of the provision in the Bailout Plan and some associated repair work.
Source of information: Excerpts from The Advocate, October 11, 2008. The numbers have been changed for clarity. Repair and tax advice, mine.
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