Journal Inquirer: State CPA society backs effort to help deduct foundation repairs
WASHINGTON — The Connecticut Society of Certified Public Accountants is supporting the efforts of U.S. Rep. John B. Larson, D-1st District, and U.S. Rep. Joseph D. Courtney, D-2nd District, to clarify how homeowners with crumbling foundations can receive federal tax relief through the casualty loss deduction.
In August, Courtney and Larson asked acting IRS Commissioner David Kautter for clarification on whether a taxpayer can take and “carry forward” a net operating loss if their casualty loss exceeds their income.
In a Sept. 10 letter to Kautter, Connecticut Society of Certified Public Accountants Executive Director Bonnie Stewart said she supports the congressmen’s efforts to mitigate the cost of foundation repairs that often can range between $150,000 and $250,000.
“Simply stated, in the vast majority of cases, the cost of repairing a crumbling foundation will far exceed the amount of taxes a homeowner will pay in any given year,” she wrote. “Thus, the taxpayer would not be able to deduct the total of their crumbling foundation casualty loss. Granting a net loss carryforward in these cases would provide homeowners with the ability to deduct their losses over a specified period.”
Stewart is supporting Courtney and Larson’s request for a technical clarification on how or whether a taxpayer could take and carry forward a net operating loss if their casualty loss exceeds their income.
In November, the IRS enacted a “safe harbor” for foundation repair costs as a casualty loss deduction from taxable income.