Co-op Owners win Casualty Loss Deduction
Co-op stockholder may deduct assessment for damage to retaining wall if caused by casualty according to the Second Circuit Court of Appeals. Alphonso CA 2, 111 AFTR 2d ¶2013-429
The Court of Appeals for the Second Circuit, reversing the Tax Court, has held that a stockholder in a residential cooperative housing corporation had a sufficient property interest under state law to claim a casualty loss deduction for her share of an assessment to fix damage to a retaining wall on the co-op's premises. However, the Second Circuit remanded the case to the Tax Court to determine if the loss was caused by a casualty.
RMS Observation: Whether or not the taxpayer ultimately prevails in this case, the Second Circuit's decision is good news for the many co-op owners in Florida who may face losses from hurricanes and face special assessments for damages to common areas on the premises of their co-ops for their share of damages caused by a Hurricane at some time in the future.
