Tag Archive for Casualties Involving Law Violations

Casualties Involving Law Violations

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This article is a follow-up to my previous article “Casualties” on casualty loss deductions in which I set forth the nature of a casualty, qualifying events, how to determine the amount of the loss, and the allowable deduction.

[This case was reported in J.K. Lasser’s Monthly Tax Letter, February, 2014].

Taxpayers built two homes but did not obtain the necessary building permits because they wanted to live without government interference. Several years later, the homes were destroyed by a fire and the taxpayers claimed a casualty loss in the year of destruction. [Note: the article did not say when this occurred].

The IRS disallowed the loss on the grounds that the taxpayers did not comply with state Read more