Two Connecticut lawmakers released a letter from the IRS on Wednesday in which they were assured that tax relief remains available for crumbling foundation victims, even with the recently passed tax plan.
Reps. Joe Courtney and John Larson said the letter also mentioned the potential for further transitional relief for those impacted by the new tax law.
“As the IRS confirmed in its letter, qualified taxpayers who paid to repair damage to their homes in 2017 or in prior open tax years will still able to deduct the cost of those repairs as a casualty loss on their 2017 returns," Courtney and Larson said in a joint statement. "This is welcome confirmation for those homeowners who have already completed repair work on their homes and will soon begin to prepare their taxes."
However, the lawmakers said given that the revenue procedure was released at the end of November, many homeowners did not have time to make the necessary repairs by the time the new tax law was signed and 2017 ended.
"Many homeowners are only now discovering the extent to which their home foundations have been damaged, or have yet to make plans to repair their homes," they continued.
Though they learned through the letter that the relief is still available.
Transitional relief may be available in 2018 and beyond.
"We will continue to work closely with the IRS and the Treasury to explore options to assist homeowners in the weeks ahead, and do all we can to ensure that as many homeowners as possible can seek tax relief in light of the new tax law," the representatives said.
The lawmakers said the IRS allowed for the treatment of crumbling foundations repairs to be reported as a "casualty loss" deduction from a taxpayer's taxable income.
The new federal tax law, which was signed in December, temporarily limits the applicability of that. It said only taxpayers who suffer damage related to a "Stafford Act" disaster. That provision expires in 20215.
Courtney and Larson recommended meeting with a qualified tax preparer to see if homeowners quality for the deduction.
Their letter from the IRS can be read here.
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