Amber Hall of Colorado bought her first home earlier this year. A couple of weeks after moving in, one of her dogs alerted her to a snake near the home.
She thought nothing of it, given the area. Later she discovered that her new home was filled with snakes.
Many of her neighbors told her to burn the house down and collect the insurance money. Instead of committing insurance fraud, she opted to hire a snake wrangler to handle the problem.
The wrangler found 20 to 30 snakes that were 2′ to 4′ long living in the walls of her home. The reptiles were of a non-venomous variety.
But sadly, that wasn’t the end of the saga.
The wrangler told her that the majority of the snakes were living in a pod under the concrete foundation of her deck. In order to fully eradicate the problem, it would need to be torn up so that they could get all of the slithering problems removed..
Unfortunately for Hall, the repairs are a non-deductible expense.
Under the Tax Cuts and Jobs Act of 2017 (TCJA), casualty losses of a personal nature are only deductible if they occur in a federally-declared disaster area. Since Colorado hasn’t suffered any hurricanes recently, she’ll be unable to deduct the expenses on her Schedule A.
The only other scenario where she could get a deduction would be if the property was considered a for-profit business under the commercial property tax laws. Since she didn’t have any tenants when the pests were discovered, there’s no way to deduct them using a Schedule E.
Her only remedy is claiming an insurance loss. We still don’t know if her insurance provider will provide any relief.
Whoever did her home inspection prior to closing should probably lose their license.
Let me leave you with this.
We received some lousy news yesterday on the economic front. While everyone was worried about the US defaulting on its debts, economic activity rose to its highest level in 13 months.
The S&P Global Purchasing Managers Survey reported its sharpest increase in the last 13 months since April of 2022. The gain was led by service businesses primarily involved in travel, dining, and other leisure activities. This increase was offset by manufacturers who reported bloated inventories and slowing orders.
The data complicates the run up to the Federal Reserve Policy Meeting to be held on June 13th – 14th. Stronger demand provides a scarcity of services which will only lead to higher prices and more inflation.
Will the Fed raise interest rates again? Will they have a choice? If they raise interest rates, will we have more bank failures? The implications abound.
One thing is certain. We aren’t out of this mess by a long shot.
The immediate threat is the debt ceiling fiasco. Hopefully that will get solved so that we can face the new threat.
We’re all going to get through this. Let’s get through it together.
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