New IRS rule offers tax relief to drywall victims

Source: Press release

Tax Agency Announces Instructions to Help Offset Costs of Repairing Corrosive Drywall

WASHINGTON, D.C. – U.S. Senators Thad Cochran and Roger Wicker (R-Miss.) today suggested that Mississippians consult a new federal procedure that provides favorable tax relief for property losses associated with corrosive drywall.

The Internal Revenue Service (IRS) has issued guidance for affected homeowners who have experienced the harmful effects of corrosive drywall, much of it imported from China following Hurricane Katrina, Hurricane Rita and subsequent storms.

IRS Revenue Procedure 2010-36 outlines how damage repair costs related to corrosive drywall, including metal corrosion and other damage, can be treated as a casualty loss. The guidelines also provide a “safe harbor” formula for determining the amount of the loss.