Tax questions

April 05, 2000

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions before the April 17 filing deadline.

During Hurricane Floyd in September, three large trees in my yard were uprooted. It cost me about $450 to get these trees properly taken down. Is that a deductible item?

This type of occurrence is called a "casualty loss." Non-business casualty losses, minus $100 per loss, are deductible to the extent they exceed 10 percent of your adjusted gross income in the year of loss. The amount of the casualty loss is the reduction in the fair market value of your property as a result of the casualty. The reduction in value is computed by determining the value of the property immediately before and immediately after the casualty. In your case, the value after the casualty would be the value of the property after removal of the trees. Your casualty loss is the difference in value plus the $450 for tree removal. The loss is reported on Form 4684, Casualties and Thefts. The deduction is ultimately taken as an itemized deduction on line 19 of Schedule A.

F. Carter Heim, CPA, Heim & Associates

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

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