Claiming a storm-damage tax deduction Tax Talk by George Saenz, CPA • Bankrate.com

Dear Tax Talk,
I recently had some damage to my home and landscaping due to a storm (microburst) and I was wondering if I can write off the cost of repairs on my taxes? I will not be making a claim on my home insurance.
-- Cindy

Dear Cindy,
The gods must be crazy: When we're not dealing with hurricanes, tornadoes, floods, tsunamis, earthquakes or rocket fire (i.e., downtown Beirut, Lebanon), here comes a strong puff of air to blow down your house. Not being familiar with microburst, I had to turn to Wikipedia to see if it meets the definition of a casualty for tax purposes.

"A microburst is a very localized column of sinking air, producing damaging divergent and straight-line winds at the surface that are similar to but distinguishable from tornadoes, which generally have convergent damage."

According to the Internal Revenue Service:

• A casualty is the damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected or unusual. • A sudden event is one that is swift, not gradual or progressive. • An unexpected event is one that is ordinarily unanticipated and unintended. • An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged.

A personal casualty loss is deductible as an itemized deduction to the extent that it exceeds two thresholds. The loss from each casualty (all the damage as a result of the microburst would be considered one casualty) must be reduced by $100. All your personal casualty losses for the year must be reduced by 10 percent of your AGI, or adjusted gross income. The $100 and 10-percent reductions were waived for the damages from the three major hurricanes in 2005, but still continue to apply to other losses.

Your loss is the decline in value to property as a result of the damage from the storm. Your repair costs may be an indication of the damage, but your loss may be actually more or less than the costs to repair. If the repairs restore the property to a better condition, then you may need to reduce the repair costs. If you don't repair or replace some items, such as the landscaping, your loss may be greater.

If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Otherwise, you cannot deduct this loss as a casualty or theft. However, this rule does not apply if the loss would not have exceeded your deductible or is excluded property. Example: Landscaping is usually not covered by insurance.

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