Storm damage to a home in mid Year 1. Repairs begin immediately but extend into Year 2. Can I charge all in year 2 rather than assigning each year the actual cost spent?
According to my TaxCut software instructions: "Although you may claim a casualty loss in the year you can reasonably estimate your loss-probably the year the bank goes under-you can't claim a bad-debt deduction until the actual amount of the loss is determined, which may well be in a later year."
Although the example referred to a non-insured bank going south, I assume a loss to personal property can be made to fit the bill. The assumption is... the estimate of the loss was incomplete until all the work was finished. Since it involved excavation and replanting, there was no way of knowing for certain it the landscaping would be finished until it started to grow. Thus... had to finish grading and planting the following Spring.
Will it fly with the IRS? It's to my advantage to claim all in Year 2 rather than 1 even though the bulk of the expense was incurred in Year 1. The complete project spanned took one year... Summer to Spring.