Can insurance deductibles be claimed on taxes for a rental or business property?

Rental and business property

Property used to produce income follows business rules. A casualty loss on that property does not need a disaster declaration, and the $100 and 10 percent of income reductions that apply to personal losses do not apply. In practice, landlords often handle it one of two ways:

• Deduct the deductible and other unreimbursed repair costs as rental expenses when the work is a repair.
• Treat it as a casualty loss when the property itself was damaged, which involves basis calculations a tax preparer should run.

A full roof replacement on a rental is generally capitalized and depreciated rather than deducted at once. IRS Publication 527 and Publication 547 cover these rules.

Home office

If you claim a home office, the business use share of a casualty loss or whole house repair may be deductible. Publication 587 explains the allocation.

Your own home

Personal residence losses are limited to qualifying declared disasters and reduced by $100 per event and 10 percent of adjusted gross income, so a typical deductible is rarely deductible.

File the claim first

The IRS generally does not allow a deduction for the insured part of a loss unless you filed a timely insurance claim. See how to file a roof insurance claim and Georgia claim deadlines. This is general information, not tax advice.