I sold my home this year. The purchase agreement was reduced $10,000 because after an inspection of our home we discovered damage to the roof. The damage was not covered by our home owners insurance. We had three bids to repair the roof and for mold removal. The buyer agreed to purchase our home for $10,000 less and he would proceed with the repairs. What can I deduct?
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Nothing. The damage you describe does not meet the "sudden and unexpected" criteria for a casualty loss. Your gain on the sale is less, possibly leading to less tax being due from the sale.
Actually, the _proceeds_ from the sale will be what your buyer agreed to pay. So according to the facts presented, that was $10,000 less than you originally agreed to -- and that's an effective deduction. If you sold your main home [which you occupied for at least
2 of the last 5 years] for a profit less than $250,000 ($500,000 if MFJ), then you owe no taxes, and don't even need to report the sale. Bill
Nothing. Your sales price is $10,000 lower so your gain is $10,000 lower.
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