
Quoting
Foxtrot
Hello all,
I have a question.
I just had an audit for 2007 from the IRS. The person that prepared my taxes back in 2007 filled a 21K deduction for loss of value of property. In 2005 a hurricane hit my condo in Miami, FL, and I lost my tar paper(I am not sure that is the true name, its the film that water/weather proofs the roof), I am on the last floor. Since the roof lost its waterproofing water seeped in and one of the rooms of my 2 bedroom became a 1 bedroom, water was coming down everytime it rained, they try to do a temporary patch which didnt work, mold set in and the insurance took 2 years to fix the roof, for the last part of 2005, 2006 and 2007 half of my apartment was inhabitable due to no roof and mold. The person who filled my taxes deducted $21K assuming that since the property(originally 172K) had loss its value(40% of the condo was unlivable(mold and water leaking)). On the IRS audit they said that since I didnt have to pay any money out of my pocket say the $21K I didnt have the right to file this as a deduction. Now if I had to sell my apartment I would have take a loss since 40% of it was unusable. Now is there a case here or not, the person who filed my taxes says that I do, the IRS auditor says that since this is a theoric loss it doesnt apply. any ideas? I have a week and half to answer the IRS, either agree to pay the $5K or appeal or go to court. I am not trying to beat the systems by no means, I just wanted this to be over. any ideas