Hardship - Code Section 165 damage repair

[jmartin]

Participant hired contractor to remodel bathroom. Before the job was completed, the contractor left the country. The participant has been left with an unusable bathroom (non working sink/toilet, holes in floor and ceiling, etc.). Expected cost to finish the job is $3k.

Question: does this qualify under Section 165? The damage was not "sudden" but could be considered unintentional. My guess is that if the repair was not "needed" and was primarily for cosmetic reason as most remodels are, it would not qualify.

[masteff]

A recent thread on the topic: http://benefitslink.com/boards/index.php?showtopic=49692

My personal opinion is this is a theft loss and not a casualty loss.