Can I write off the cost of repairs to our home as a result of a broken pipe?

Question

The pipe that broke was upstairs and the water went through the ceiling and down the walls destroying everything in its path. The carpet had to be replaced as well as some of the drywall and insulation. We had to pay for the servies of a plumber, an electrician and drywaller. I did the rest of the work (demolition, removal of debris and painting, spackling, etc. By the way, we did not have adequate insurance to cover the cost of repairs so it all went on the credit card.

Answer 1

Yes and No. Such losses are deductible, but only to the extent that they exceed 10% of your adjusted gross income, as stated on line 38 of Form 1040. Hence, if you have an adjusted gross income of $50,000 for the year of the loss, you are entitled to deduct only that part of your loss which exceeds $5,000.