Is storm damage to trees tax deductible? Considering the cost of repairing your property, and the potential personal casualty loss, you’d think so. In this post, Country Trees, LLC, your professional tree service in Angleton, TX, answers this question in greater detail.
The Short Answer
Yes, the government makes allowances for casualty losses on your income tax when it comes to storm-damaged trees. These rules apply whether they’re federally declared disasters or not. However, you must follow the following special rules to ensure the IRS accepts your deduction.
Claiming Storm Damage
To make a claim, you’ll need to do the following.
Step 1: Document the Damage
You must document the damage carefully to qualify. Take numerous pictures of the damage and ensure that you explain all the details to the appraiser. Include measurements of the tree trunk or stump and the size of broken branches. Also, take pictures during the clean-up and after it.
Step 2: File an Insurance Claim
While the answer to, “Is storm damage to trees tax deductible?” is, “Yes,” who can claim depends on who pays for the cleanup. If your insurer covers the damage, you can’t claim the tax deduction, as they will.
However, if the insurer only pays for part of the damage, then you can claim the remainder. Say, for example, you have a $500 deductible, and the insurance company pays everything else. That $500 may be tax deductible.
File your claim and then keep any paperwork relating to it. Be sure to keep the letter regarding the claim outcome and how much your insurance will pay because you may need this as proof for the IRS.
Step 3: Speak to Your Tax Advisor
A tax specialist is the best person to advise you on how much you can claim and what expenses are tax-deductible. It’s not always beneficial to itemize your deductions, so speaking to an expert allows you to maximize your potential return.
Your advisor might also identify other legal deductions that can help you get as much as possible back.
Step 4: Assess Your Loss
Assuming it’s worth claiming the damage, keep copious records of what it costs for every stage, from cleanup to restoring the landscape. This can include:
- Any property restoration costs
- The cost of tree removal and stump grinding
- The expenses related to purchasing and planting new trees
You will need to provide official receipts to back up your claim, so be sure to deal with a reputable company. You’ll also need an appraisal that confirms that the restoration process was necessary to restore the property’s fair market value. Also, keep any evidence of payments your insurer makes and deduct these from the total you claim.
Step 5: Call an Arborist
When dealing with the IRS, always cover all your bases. Asking for a professional appraisal from an arborist is the most effective way to do this, as few other professionals understand the true value of the tree.
Your arborist will consider many factors, including:
- The tree species
- The tree’s condition after the storm
- Costs related to removal
- The location of the damaged tree
- Costs to restore the landscape
It’s critical to deal with a reputable arborist with experience in such matters. Any discrepancies or inadequacies will result in the IRS denying the deduction.
Contact Us for Expert Advice
Now that you know the answer to, “Is storm damage to trees tax deductible?” is, “Yes,” it’s time to call in the experts. Country Trees, LLC, offers a comprehensive range of emergency tree services in Angleton, TX, and the surrounding areas. Call us at (979) 824-0325 to schedule your consultation today!