Home Improvement Contractor - Licensed Contractors

Can I deduct a loss from a bankrupt home improvement contractor on my Federal taxes?

Public Comments

1. We too were in a similar situation, only the contractor didn't go bankrupt, he took our money and ran with it. We filed with an attorney to try to recover our losses, but eventually were told that we would probably pay more in attorney fees than we would ever collect from this contractor. We lost out on $17,000 plus attorney fees. When we went to file our taxes this year we took all the receipts with us, but were told that we cannot claim it until the house was sold. You might want to call and ask a local tax prepare office if you can claim or not. Or situations seem to be a little bit different. Good Luck, and sorry you were caught up in the mess of lousy contractors.
2. It depends. Do you deduct any part of your home(home office)? If the answer is yes than you can deduct the expense. If not I'm sorry to say that you can not use it as a deduction. As far as using it when you sell the house you can do that but if you have lived in that home for 2 yr there will be no need to do that because you will not be taxed on the money you make from the home. I hope for your sake you have a home office I hate when people rip people off!!!