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I got a head scratcher in today.

In Dec 2011, there was a wind storm that blew off part of the client's roofing on their home. But their roof is a flat roof and not visible from the ground. So they didn't know they had a problem.

In January 2012, the rain finally came and they ended up with some significant water damage.

What year do we claim the casualty loss? In 2011 when the roof damage happened? Or in 2012 when they discovered the roof damage and had the water damage?

Perhaps I need to look at Phil's favorite door number 3. Is it two casualties? One wind and one water. I don't like the tax result from that one, as then they have to take the 10% of AGI haircut twice. It would probably eliminate any tax benefit for the roof damage, as that is pretty small compared to the water damage.

Thanks for any comments.

--Peter
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Is it two casualties?

With the caveat that I know precious little about this, that sounds like the winner (bad choice of words) to me. I'm basically hanging this conclusion on the "sudden, unexpected" aspect of casualty losses that I seem to recall.

The windstorm was such an event. One could argue that the prudent homeowner would have looked for damage after that. (This thought may well be influenced by my Kansas roots, since in those parts people are often checking their roofs. I also recall more than one case in which the homeowner got the insuror to pay for part of a roof replacement that was due anyway.)

Since the roof damage went undiscovered, the water damage was likewise sudden and unexpected, in a separate event, the rains.

Not that I know it would really matter, but how did the insuror treat it?

Phil
Rule Your Retirement Home Fool
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Not that I know it would really matter, but how did the insuror treat it?

I believe they are only charging a single deductible for the whole mess. Which would imply they believe it to be a single casualty.

--Peter
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What year do we claim the casualty loss? In 2011 when the roof damage happened? Or in 2012 when they discovered the roof damage and had the water damage?

How do they know that the roof damage was in 2011 and not in 2012?
From what you wrote, it looks to me like they *don't* know for sure (or they would have gotten it fixed)
Is it possible that the 2011 storm "loosened" the roof, but the January storm is what actually caused the roof to fail?
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