MANATEE — The Internal Revenue Service should consider allowing homeowners to deduct Chinese drywall-related losses on their federal income-tax returns, several lawmakers said.
Sen. Bill Nelson of Florida and three lawmakers from Virginia — Sens. Mark R. Warner and Jim Webb, and Rep. Glenn Nye — made the request in a letter dated Tuesday and made public Thursday.
They asked the IRS to clarify whether a tax-code section that allow taxpayers to deduct property losses suffered as a result of an unexpected event, such as a fire or storm, also applies to those with Chinese drywall.
“Taxpayer losses associated with Chinese drywall seems to meet the three criteria for the deduction in that the excessive corrosion and emission of gas-like fumes that appears to be linked to the drywall is unexpected, unusual and sudden,” the letter said. “If this deduction applies, it would help alleviate our constituents’ federal tax burden during this time of crisis.”
The IRS’ media-relations office referred questions to the U.S. Treasury, which did not immediately return a telephone message Thursday.
Hundreds of homeowners in Florida, Virginia and several other states have complained to state and federal officials about Chinese drywall. Homeowners contend the problem drywall has ruined air-conditioning systems, electronics and appliances; made their homes uninhabitable and lose value; and caused headaches, nose bleeds and respiratory problems.
The potential losses could be in the hundreds of millions of dollars, as enough Chinese drywall was imported from 2004 to 2006 to go into as many as 100,000 U.S. homes, according to some estimates.
The congressmen said those homeowners need financial relief, as many have moved out because of health concerns and now are saddled with paying the mortgage on the damaged home as well as paying rent elsewhere.
“As you can imagine, most families cannot bear the costs associated with maintaining two homes, especially in this economy,” the letter said.
Ongoing investigations by state and federal health, environmental and product-safety agencies have not conclusively linked the drywall to health problems. But limited testing has found Chinese drywall contains higher levels of sulfur and organic materials than domestic drywall.
Duane Marsteller, transportation/growth and development reporter, can be reached at 745-7080, ext. 2630.
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