re: Tax question about Casualty & Theft Loss, probably

tricky one.....

Technically a casualty loss is defined as the decrease in the fair market value of the property immediately after the causualty or theft. The problem is the casualty occurred 26 years ago when you didn't own the property, so you would be hard pressed to demonstrate a decrease in value immediately after the casualty. I don't think you can just decide to use the date of discovery of the contamination as the date of the casualty. You also have to be able to document how you calculated your loss. Ideally with appraisals before and after the casualty. Another problem.

How much do you figure your loss to be?

There may be tax cases on this. There are many EPA Superfund sites where the owners of the land have had similar experiences. Maybe your tax guy can find a similar tax case that benefits you and go ahead and claim your loss. IDK, lets see what some other posters think. They have some bright minds on this board.