Federal Tax Relief for Crumbling Foundations
Congressman Joe Courtney and John Larson have announced approval of new federal tax relief for homeowners dealing with crumbling foundations.
Under current federal tax law, taxpayers may deduct a casualty loss from their income if they have suffered a sudden loss due to fire, flood, theft, or other sudden and unusual causes. While pyrrhotite-related damage develops over time, the IRS has now approved a casualty deduction related to this longer-term damage. Specifically, the guidance allows for the treatment of crumbling foundation-related repair costs as a “casualty loss” deduction from a taxpayer's taxable income. The change is effective immediately, and taxpayers are allowed to submit amended returns.
This development will complement the proposal we passed at the state level to provide financial relief to homeowners with crumbling foundations.