Deducting Drought Damage from 1980 Income Tax Returns: Guidelines on Proving Subsoil Shrinkage and Estimating Property Damage, 1981-01-01 - 1981-12-31

Item — Box: 4, Folder: 2

Identifier: CAC_CC_109_4_22_2_0014

Staff Only

Deducting Drought Damage from 1980 Income Tax Returns: Guidelines on Proving Subsoil Shrinkage and Estimating Property Damage, 1981-01-01 - 1981-12-31

The IRS allows for deductions on income tax returns for damage to residential property caused by subsoil shrinkage in excess of $100 that has not been compensated by insurance. To prove the damage, a professional soil engineering opinion is recommended. The amount of damage can be determined by the difference in fair market value before and after the damage, with a professional appraisal being the best evidence. If repairs are not made until the following year, the loss can still be deducted in the year it occurred. Casualty losses under $100, losses compensated by insurance, damage to trees, bushes, or landscaping are not deductible unless caused by rapid, severe, and unusual subsoil shrinkage. The taxpayer must file an amended return if necessary.

Dates

1981-01-01 - 1981-12-31

Language of Materials

English

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