Claim damaged or downed trees as a tax deduction
March 10, 2012
Did you lose a tree this year due to wind or snow damage? Did other trees have serious storm damage?
If so, then the casualty loss incurred from fallen or storm-damaged trees can be claimed as a deduction on your income taxes. Damage from vandalism or other man-made causes, like a vehicle pushing a tree over, also qualifies.
The tax deduction may be the only financial break most property owners get for tree losses because rarely are trees covered in homeowner’s insurance. That makes the tax deduction worth knowing about.
What qualifies as “damage?”
Trees that have been damaged 50 percent or more may be claimed as a total loss. Trees that are damaged less than 50 percent may be claimed based on the percentage of the damage or loss. Thus, loss on a tree that has been damaged 40 percent may be claimed at 40 percent of the tree’s full value. This could apply to trees that lost major limbs from high winds or snow damage, for example.
What if the tree has been cut down, chipped and hauled away?
If the 30-ft. blue spruce that fell in your front yard has been cut up and hauled away, you may still be able to establish its value. You will need the invoice documenting the tree was removed that may contain other information about the size and species of the tree and nature of the damage.
You must also be able to document what the tree looked like prior to the damage. Use family photos or pictures from Google Earth which also has a setting that goes back in time for several years. Check all the views available for your property-aerial and street-to find your tree.
How do you determine the dollar amount of loss?
If your tree was small enough that it can be replaced with the same species of similar size, the loss is based on the cost to remove and replace the fallen tree with a new one. If you had a tree removed, keep the invoice for your tax records and research the cost of replacing the same species of like size.
Replacement trees for very large, mature trees are generally not available from a nursery, so you will need an appraisal that takes into account the species, size, condition (general health) and location of the tree. This evaluation will require a specially-trained expert or consulting arborist.
Since trees can appraise as high as $20,000 or more, it might be well worth the effort to call in an expert. The appraisal fees can also be included in the amount claimed in the tax deduction. Consult with your tax advisor to be sure you have the necessary documentation for the claim.
While it always hurts to lose a good tree, claiming the deduction may help fund a replacement.
Need help with your trees? Find a professional among ALCC’s members located in six chapters statewide.
Courtesy Associated Landscape Contractors of Colorado and Neils Lunceford, a landscaping company based in Silverthorne that is a member. You may contact them at (970) 468-0340.