A Not-So-Casual Look at Casualty Loss - Part 4

Assisting Victims of Major Disasters Series Outline Part 1: Definition of casualty loss and where we find IRS guidance Part 2: Casualty loss related to a presidentially declared major disaster Part 3: Casualty losses that do not relate to a declared disaster Part 4: IRS provisions designed to assist victims of major disasters “On the nightly news, I see the terrible plight of people whose housing was destroyed after the recent series of major disasters. Can we help these people?” As we have seen in this series, the topic of casualty loss is closely aligned with major disasters. For this reason, IRS guidance on casualty loss also discusses ways that owners of any tax credit properties in the

A Not-So-Casual Look at Casualty Loss - Part 3

Loss and Non-Major Disasters Series Outline Part 1: Definition of casualty loss and where we find IRS guidance Part 2: Casualty loss related to a presidentially declared major disaster Part 3: Casualty losses that do not relate to a declared disaster Part 4: IRS provisions designed to assist victims of major disasters A reduction in qualified basis due to casualty loss that is unrelated to the declared major disaster is handled differently than loss resulting from declared disasters in two major ways: 1) The disallowance of credits. 2) The reasonable period to restore. If the building’s qualified basis is restored within a reasonable period, the building will not be subject to the usual pena

A Not-So-Casual Look at Casualty Loss - Part 2

Major Disasters Series Outline Part 1: Definition of casualty loss and where we find IRS guidance Part 2: Casualty loss related to a presidentially declared major disaster Part 3: Casualty losses that do not relate to a declared disaster Part 4: IRS provisions designed to assist victims of major disasters When disasters warranting assistance from the federal government occur, the Robert T. Stafford Disaster Relief and Emergency Assistance Act gives the President authority to issue a major disaster declaration for affected areas. Following the declaration, the Federal Emergency Management Agency (FEMA) may designate specific cities, counties, or other local jurisdictions as eligible for assis

A Not-So-Casual Look at Casualty Loss - Part 1

Introduction and IRS Guidance “I’ve already lost my property, will I lose tax credits, too?” Whether it is a kitchen fire that destroys a unit or a hurricane that takes out an entire apartment community, property damage events result in casualty loss. As far as major disasters, a review of the last three years FEMA data shows that there were 79 areas affected by declared disasters in 2015 and there were 102 in 2016. As of late October, 2017, there were 124 such areas, mostly resulting from storms and wildfires. These events potentially affect or destroy many, many affordable housing units. On top of these major disasters, there are other losses that result from more localized events, such as

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