Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has released a fact sheet highlighting provisions of the National Disaster Relief Act of 2008, Subtitle B of Title VII of the Emergency Economic Stabilization Act of 2008 (P.L. 110-343), which provide tax relief for victims of federally declared disasters occurring after December 31, 2007, and before January 1, 2010. The National Disaster Relief Act, which provides numerous tax benefits that may be used by anyone who is affected by a federally declared disaster, effectively replaces the former strategy of providing targeted benefits for disaster victims in the weeks or months following the incident.

  Major provisions of the National Disaster Relief Act include:

  --an expansion of the availability of the casualty loss deduction to include not only individual taxpayers who itemize but, also, those who claim the standard deduction;

  --an increase, for tax years beginning in 2009, in the amount by which all individual taxpayers must reduce their personal casualty losses from each casualty from $100 to $500 (the $100 floor returns for tax years beginning after 2009);

  --a waiver of the requirement that the net casualty loss deduction be allowed only if the casualty loss exceeds 10 percent of the individual's adjusted gross income;

  --the creation of a special five-year net operating loss carryback period for qualified disaster losses; and

  --increases in the charitable mileage deduction and in the charitable use of a vehicle allowance.

  Other important provisions in the National Disaster Relief Act for business taxpayers include:

  --an election to deduct, rather than capitalize, certain qualified disaster cleanup expenses;

  --a waiver of certain mortgage revenue bond requirements for affected business taxpayers and permission to use the bond proceeds for rebuilding;

  --a new set of disaster private activity bonds for business reconstruction;

  --a deduction for 50 percent of the cost of qualifying property in addition to the regular depreciation allowance that is normally available; and

  --an increase in the limits that can be expensed for qualifying Code Sec. 179 property.

  Certain provisions of the National Disaster Relief Act do not apply to the Midwestern disaster area, i.e., disasters affecting the Midwest that were declared from May 20, 2008 through July 31, 2008. That is because the Heartland and Hurricane Ike Disaster Relief Act, part of the same legislation that resulted in the National Disaster Relief Act, provides other tax benefits.

IRS Fact Sheet FS-2009-8, 2009FED ¶46,254

Other References:

 
Code Sec. 63

  CCH Reference - 2009FED ¶6023.033

 
Code Sec. 143

  CCH Reference - 2009FED ¶7786.025

  CCH Reference - 2009FED ¶7786.073

 
Code Sec. 165

  CCH Reference - 2009FED ¶10,005.01

  CCH Reference - 2009FED ¶10,005.041

 
Code Sec. 168

  CCH Reference - 2009FED ¶11,279.001

 
Code Sec. 172

  CCH Reference - 2009FED ¶12,014.061

 
Code Sec. 179

  CCH Reference - 2009FED ¶12,126.01

  CCH Reference - 2009FED ¶12,126.03

  CCH Reference - 2009FED ¶12,126.0325

 
Code Sec. 198A

  CCH Reference - 2009FED ¶12,467.01

  Tax Research Consultant

  CCH Reference - TRC INDIV: 54,200
CCH Reference - TRC INDIV: 54,300
CCH Reference - TRC BUSEXP: 45,154.05
CCH Reference - TRC BUSEXP: 57,300
CCH Reference - TRC BUSEXP: 57,304.45
CCH Reference -
TRC DEPR: 3,600