Taxpayer started a major home renovation project about two years ago: moving walls, replacing windows, new kitchen and appliances? everything. Midway through the project, a number of problems became obvious ? bad wiring, leaky roof, etc., etc. Contractor became slower and slower to return calls and eventually just walked off the job, taking a portion of the payments paid up front and leaving the work unfinished.
Taxpayer got a new contractor and is also finishing some of the work as do-it-yourself projects and is slowly approaching completion. Taxpayer also got a lawyer to recover form the original contractor. That may drag on for awhile.
Other than the energy credits for windows, is there anything here that can be recovered as a tax deduction? This doesn?t meet the definition as a casualty loss and there is no in-home office component, so it all seems to be personal. Taxpayer ran into a ?tax attorney? acquaintance at a party who claims to have had a similar experience and said he ?wrote it all off? as a loss.
Does this qualify as any sort of deductible loss? Legal fees? Suggestions?