In response to a letter from Senator Jim Webb, the Internal Revenue Service (IRS) has declared that residents, in or around Hampton Roads, whose homes have been severely damaged by Chinese drywall may qualify for special tax deductions.
According to the IRS’s letter to Webb, homeowners may be able to claim a casualty loss on their tax returns if they have Chinese drywall that emits an unusual or severe concentration of chemical fumes that causes extreme and unusual damage. [To view the IRS’s response, please click here].
“For those who have been affected by these harmful materials, this news will give them some financial relief,” said Senator Jim Webb. “I look forward to hearing more from the U.S. Consumer Product Safety Commission on how to remedy this problem and prevent it from happening in the future.”
Generally, the amount of such a deduction is the difference between the value of the house before and after the sudden, unexpected or unusual event causing the damage. In other words, qualifying taxpayers may be eligible to claim tens of thousands of dollars on their tax returns for the damage Chinese drywall has caused them.
Tainted Chinese drywall has been found in homes in abundance in the Hampton Roads area of Virginia and also in 20 other states. It contains materials suspected of corroding electrical wiring and components of air-conditioning and other household appliances.
The drywall also is linked to health problems for homeowners and their families, including respiratory problems and insomnia. Some homeowners have been forced to relocate and pay for a new home in addition to the mortgage on their tainted house.
While the majority of reports about Chinese drywall come from Virginia, Florida, and Louisiana, problems have proved to be widespread with reports coming from 18 other states and the District of Columbia, according to the U.S. Consumer Product Safety Commission (CPSC), which began investigating in February.
The CSPC also revealed new concerns that drywall fumes not only corrode air conditioners, but other appliances such as refrigerators and stoves. It is checking into reports that corrosion can lead to fires.
To view the original letter to the IRS, please click here.