[Federal Register Volume 84, Number 200 (Wednesday, October 16, 2019)]
[Rules and Regulations]
[Pages 55245-55246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22376]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 84, No. 200 / Wednesday, October 16, 2019 /
Rules and Regulations
[[Page 55245]]
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9878]
RIN 1545-BP44
Election To Take Disaster Loss Deduction for Preceding Year
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulation and removal of temporary regulation.
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SUMMARY: This document contains a final regulation relating to the
election to accelerate the timing of a loss sustained by a taxpayer
attributable to a federally declared disaster. Additionally, this
document removes the temporary regulation.
DATES: Effective Date: The final regulation is effective October 11,
2019.
Applicability Date: For date of applicability, see Sec. 1.165-
11(h).
FOR FURTHER INFORMATION CONTACT: Daniel Cassano (202) 317-7011 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to the Income Tax Regulations (26
CFR part 1) under section 165(i) of the Internal Revenue Code regarding
the election to deduct a loss attributable to a federally declared
disaster for the taxable year prior to the year in which the disaster
occurred. On October 14, 2016, a temporary regulation (TD 9789) was
published in the Federal Register (81 FR 70938) relating to the
election to take a disaster loss deduction for the preceding year. A
notice of proposed rulemaking (REG-150992-13) cross-referencing the
temporary regulation was also published in the Federal Register (81 FR
71025) on October 14, 2016. Finally, a revenue procedure (Rev. Proc.
2016-53, 2016-44 I.R.B. 530) was published in the Internal Revenue
Bulletin on October 31, 2016 (the revenue procedure with the proposed
and temporary regulations collectively, ``the 2016 guidance''). The
2016 guidance extended the deadline to make the section 165(i) election
as well as the deadline to revoke the section 165(i) election. The 2016
guidance also clarified various rules associated with the section
165(i) election. For example, the 2016 guidance clarified that the
election is made on either an original Federal income tax return for
the preceding year or an amended Federal income tax return for the
preceding year.\1\
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\1\ To facilitate this election, Section D, Election to Deduct
Federally Declared Disaster Loss in Preceding Tax Year, was added to
Form 4684, Casualties and Thefts.
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No public comments were received and no public hearing was
requested or held. This final regulation adopts the proposed regulation
substantially without change. Additionally, the temporary regulation is
removed.
Special Analyses
This regulation is not subject to review under section 6(b) of
Executive Order 12866 pursuant to the Memorandum of Agreement (April
11, 2018) between the Department of the Treasury and the Office of
Management and Budget regarding review of tax regulations. Because the
regulation does not impose a collection of information on small
entities, a Regulatory Flexibility Act (5 U.S.C. chapter 6) analysis is
not required. Pursuant to section 7805(f), the notice of proposed
rulemaking preceding this regulation was submitted to the Chief Counsel
for Advocacy of the Small Business Administration for comment on its
impact on small business. No comments were received.
Drafting Information
The principal author of this regulation is Daniel Cassano of the
Office of the Associate Chief Counsel (Income Tax & Accounting).
However, other personnel from the Treasury Department and the IRS
participated in its development.
Statement of Availability of IRS Documents
IRS Revenue Procedures, Revenue Rulings, Notices, and other
guidance cited in this document are published in the Internal Revenue
Bulletin and are available from the Superintendent of Documents, U.S.
Government Publishing Office, Washington, DC 20402, or by visiting the
IRS website at http://www.irs.gov.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Sec. 1.165-11T [Removed]
0
Par. 2. Remove Sec. 1.165-11T.
0
Par. 3. Revise Sec. 1.165-11 to read as follows:
Sec. 1.165-11 Election to take disaster loss deduction for preceding
year.
(a) In general. Section 165(i) allows a taxpayer who has sustained
a loss attributable to a federally declared disaster in a taxable year
to elect to deduct that disaster loss in the preceding year. This
section provides rules and procedures for making and revoking an
election to claim a disaster loss in the preceding year.
(b) Definitions. The following definitions apply for purposes of
this section:
(1) A federally declared disaster means any disaster subsequently
determined by the President of the United States to warrant assistance
by the Federal Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act.
(2) A federally declared disaster area is the area determined to be
eligible for assistance pursuant to the Presidential declaration in
paragraph (b)(1) of this section.
(3) A disaster loss is a loss occurring in a federally declared
disaster area that is attributable to a federally declared disaster and
that is otherwise allowable as a deduction for the disaster year under
section 165(a) and Sec. Sec. 1.165-1 through 1.165-10.
(4) The disaster year is the taxable year in which a taxpayer
sustains a loss
[[Page 55246]]
attributable to a federally declared disaster.
(5) The preceding year is the taxable year immediately prior to the
disaster year.
(c) Scope and effect of election. An election made pursuant to
section 165(i) for a disaster loss attributable to a particular
disaster applies to the entire loss sustained by the taxpayer from that
disaster during the disaster year. If the taxpayer makes a section
165(i) election with respect to a particular disaster occurring during
the disaster year, the disaster to which the election relates is deemed
to have occurred, and the disaster loss to which the election applies
is deemed to have been sustained, in the preceding year.
(d) Requirement to file consistent returns. A taxpayer may not make
a section 165(i) election for a disaster loss if the taxpayer claims a
deduction (as a loss, as cost of goods sold, or otherwise) for the same
loss for the disaster year. If a taxpayer has claimed a deduction for a
disaster loss for the disaster year and the taxpayer wants to make a
section 165(i) election with respect to that loss, the taxpayer must
file an amended Federal income tax return to remove the previously
deducted loss on or before the date that the taxpayer makes the section
165(i) election for the loss. Similarly, if a taxpayer has claimed a
deduction for a disaster loss for the preceding year based on a section
165(i) election and the taxpayer wants to revoke that election, the
taxpayer must file an amended Federal income tax return to remove the
loss for the preceding year on or before the date the taxpayer files
the Federal income tax return or amended Federal income tax return for
the disaster year that includes the loss.
(e) Manner of making election. An election under section 165(i) to
deduct a disaster loss for the preceding year is made either on an
original Federal income tax return for the preceding year or an amended
Federal income tax return for the preceding year in the manner
specified by guidance issued pursuant to this section.
(f) Due date for making election. The due date for making the
section 165(i) election is six months after the due date for filing the
taxpayer's Federal income tax return for the disaster year (determined
without regard to any extension of time to file).
(g) Revocation. Subject to the requirements in paragraph (d) of
this section, a section 165(i) election may be revoked on or before the
date that is ninety (90) days after the due date for making the
election.
(h) Applicability date. This section applies to elections and
revocations that are made on or after October 16, 2019.
Sunita Lough,
Deputy Commissioner for Services and Enforcement.
Approved: September 3, 2019.
David J. Kautter,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2019-22376 Filed 10-11-19; 4:15 pm]
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