Please review my other postings on the Chinese Drywall issue in the blog.
In numerous instances, homeowners with certain imported drywall have reported corrosion of copper wiring and components as well as the presence of sulfur gas odors. In Nov 2009, the Consumer Product Safety Commission (CSPC - http://www.cpsc.gov/ ) that an indoor air study of a sample of 51 homes found a strong association between the problem drywall, levels of hydrogen sulfide in those homes and corrosion of metals in those homes.
On September 10, 2010, the Internal Revenue Service issued guidance providing relief to homeowners who have suffered property losses due to the health effects of certain imported drywall installed in homes between 2001 and 2009.
Revenue Procedure 2010-36 (www.irs.gov/pub/irs-drop/rp-2010-36.pdf) enables affected taxpayers to treat damages from corrosive drywall as a casualty loss and provides a formula for determining the amount of the loss.
This procedure provides the following:
- Homeowners who pay to repair the damages may treat the amount paid as a casualty loss in the year of payment.
- Taxpayers who have already filed generally have 3 years to file an amended return.
- The amount of loss that can be claimed is dependent on whether or not the taxpayer has a pending claim for reimbursement through insurance, litigation or otherwise.