Tax relief options available for losses from natural disasters

Washington National Tax Services

Major storms over the past few years, such as 2012’s Hurricane Sandy, have caused significant property damage in many states. Tax code provisions offer relief to taxpayers affected by such disasters. For example, the tax law allows a casualty loss for partial destruction of property, provides accelerated depreciation rules for qualified disaster assistance property, favorably modifies the rules applicable to involuntary conversions resulting from certain disasters, and allows certain disaster losses to be claimed in the preceding tax year.

In addition, the proposed and temporary "tangible" regulations under section 263(a) — which address the treatment of costs associated with acquisition or improvement of tangible property and generally are effective for tax years beginning on or after January 1, 2014 — will affect taxpayers harmed by disasters and thus also should be considered.

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