Question

Water Damage on unit I was leasing

Forum|Forum|1 year ago
March 24, 2025
3 replies
0 views

Hi -- a sprinkler went off in a unit I was renting, causing enough damage that I had to settle with a collections company for $12,500. The corporation that owned the rental unit wouldn't pay, and we had lawyers involved for almost 2 years. Finally I settled. Can I claim the $12,500 in any way on my Federal Taxes? The sprinkler we believe went off by mistake, but through the process of it getting reset, all evidence was removed. It wasn't part of any "disaster", as we believe it malfunctioned. I paid the collections company in 2024, so hoping there is a way to claim on my taxes.

O

Opus 17

You were a tenant? No, there is nothing you can do on your tax return. Did you have renter's insurance?

W

WaterDamageinAZAuthor

Hi -- Yes. I was the tenant. Renters insurance covered "my" property, but not the damage done to the unit itself. Insurance company had clauses in there about "damage caused by fire, lightning, tornado, but not "a sprinkler going off". Incompetence at the property management company, stupid people at the firm, and a few dumb lawyers that I hired had this go way too long. Eventually I settled. But I see the notes here that there is nothing I can do. I saw things about "Presidential declared emergencies", but this was not that. Oh well. Thanks

B

Bsch4477

You can’t claim casualty loss on your Federal return unless caused by a federally declared disaster. Arizona doesn’t allow casualty loss at all.

R

RobertB4444

I'm afraid not. After the TCJA was passed in 2017 disaster losses were limited to those in federally declared disaster areas.

@WaterDamageinAZ

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