Income Tax Return questions

[The Iron Giant]

I know there are some tax professionals on the budget board and was hoping I can get some information on a couple of questions

1. We had a tree fall on our house during Hurricane Sandy and have a $1000 deductible on our homeowners insurance. Is that $1000 we paid out of our pocket to repair our home deductible anywhere on our income tax return?

2. Also related to damage from the storm - our roof, siding and windows were damaged by the tree and the insurance company gave us money to make repairs. Is that money taxable?

3. Also related to the storm - we paid additional money out of pocket to upgrade to bigger windows and nicer siding when repairing the damage. Is any of that money we spent to repair our house deductible on our income tax return?

Thank you for any help

 

[Cheshire Figment]

1. This is deductible, with two limitations, on Line 20 of Schedule A. You need to get Form 4684 and the related instructions. Check out www.irs.gov for these.

2. The money is not taxable to the extent that it was used for repairs and/or replacement.

3. The only amount that can be deducted is any excess costs above the reimbursement to return the house to the condition it was in prior to the casualty. Any improvements are not deductible.

Mike (CPA Retired)

 

[The Iron Giant]

Thank you very much for the information. It was very helpful