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 Rev. Rul. 63-21

1963-1 C.B. 37

Caution: Superseded by Rev. Rul. 64-332

IRS Headnote

If a taxpayer suffers a casualty loss during the period between the close of his taxable year and the due date of his income tax return, he may elect to take the deduction for his loss on the return for the preceding taxable year, provided the loss is one that occurred in an area determined by the President of the United States to warrant Federal disaster assistance.

Full Text

Rev. Rul. 63-21 /1/

The Internal Revenue Service has been requested to explain the special rules for the tax treatment of losses suffered by property owners in certain disaster areas and the procedures which will be used for identifying the disaster areas involved.

Public Law 87-426, C.B. 1962-1, 374, added a new subsection (h) to section 165 of the Internal Revenue Code of 1954, relating to deductions for losses, to provide in effect that a taxpayer who suffers a casualty loss may, under certain circumstances, take his loss deduction, to which he would otherwise be entitled for the year in which the disaster occurred, on his Federal income tax return for the preceding year. However, the amendment does not change the rules for determining the amount of the deduction which is allowable.

The special rules of section 165(h) apply to losses which occur in an area determined by the President of the United States to warrant disaster assistance by the Federal Government, pursuant to Public Law 875, Eighty-first Congress, Second Session, approved September 30, 1950.

These rules apply to losses attributable to a disaster which occurs during the period following the close of the taxable year and on or before the due date for filing the income tax return for the taxable year, determined without regard to any extension of time for filing granted the taxpayer.

Disaster losses which occur after the time for filing the taxpayer's income tax return for a particular year will not be entitled to the benefit of this provision. These special rules apply only to losses from disasters occurring after December 31, 1961, and apply to fiscal year taxpayers as well as those on a calendar year.

A taxpayer who qualifies may take the deduction for the loss in the preceding year's return by electing to do so. The election is made by filing the original or an amended income tax return for the taxable year preceding the year in which the disaster occurred and taking the deduction for the loss in that return. Or, he may file a claim for refund on Form 843 and supply the necessary facts and computation to support his claim. A taxpayer who makes the election may not take the same disaster loss into account in his declaration of estimated tax for the year in which the disaster occurred or in his income tax return for that year.

The amount of the disaster-loss deduction may not exceed the amount which otherwise would have been allowable if the taxpayer claimed the deduction in the taxable year in which the disaster occurred. In computing the disaster loss, the taxpayer must take into account any claim for reimbursement (insurance or otherwise) with respect to which there is a reasonable prospect of recovery. Section 1.165-1(d)(2) of the Income Tax Regulations.

In order to assist the Service in expediting these refunds, each taxpayer who makes this election should identify his return, amended return, or claim, by securely attaching to the front of it a statement indicating that a disaster loss is claimed. If an amended return or claim is filed, the taxpayer's computation should reflect the amount of tax due, or refund previously claimed, as shown on his original return.

During 1962, the President has determined that the areas listed below have been adversely affected by natural disasters of sufficient severity to warrant disaster assistance. Therefore, losses occurring in those areas qualify for the special tax treatment authorized by section 165(h) of the Code.

Notices of additional declarations of major disaster areas will be published currently in the Internal Revenue Bulletin as supplements to this Revenue Ruling, as such declarations are made.

                 Major Disaster Areas Declared in 1962
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   State               Type of disaster           Disaster beginning
                                                     on or about--
--------------------------------------------------------------------
California   Floods                                     02/07/62.
California   Severe storms and flooding                 10/10/62.
Delaware     Severe storm, high tides and flooding      03/06/62.
Florida      High tides                                 11/28/62.
Guam         Typhoon                                    11/11/62.
Idaho        Floods                                     02/08/62.
Iowa         Floods                                     03/09/62.
Kentucky     Floods                                     02/26/62.
Maryland     Severe storm, high tides and flooding      03/06/62.
Nebraska     Floods                                     03/12/62.
Nebraska     Floods                                     06/06/62.
Nevada       Floods                                     02/10/62.
New Jersey   Severe storm, high tides and flooding      03/06/62.
New York     Severe storm, high tides and flooding      03/06/62.
North
Carolina    Severe storm, high tides and flooding      03/07/62.
Oregon       Severe storms                              10/11/62.
South
Dakota      Floods and tornadoes                       03/27/62.
Virginia     Severe storms, high tides and flooding     03/06/62.
Washington   Severe storms                              10/11/62.
West
Virginia    Floods                                     02/26/62.
Rev. Rul. 63-21 Supp. 4
1963-1 C.B. 38
Caution: Superseded by Rev. Rul. 63-21 Supp. VIII
Full Text
Rev. Rul. 63-21 Supp. IV
Under section 165(h) of the Internal Revenue Code of 1954, taxpayers, who suffer a casualty loss between the close of a taxable year and the due date of their income tax returns for that year, may elect to take the deduction for that loss on the return for the immediately preceding taxable year, provided the loss is one that occurred in an area determined by the President of the United States to warrant Federal disaster assistance.
Revenue Ruling 63-21, page 37 this Bulletin, explains how that provision is to be applied and identified the 1962 disasters which gave rise to this special treatment. The following disasters, qualifying for such treatment, have occurred thus far in 1963.
/1/ Based partially on Technical Information Release 376, dated Apr. 5, 1962.
           Major Disaster Areas Declared Thus Far in 1963
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Disaster             Type of disaster           Disaster beginning
  areas                                              on or about--
--------------------------------------------------------------------
California   Severe storms, floods and                  01/30/63
               excessive rainfall.
Georgia      Severe storms and flooding                 03/11/63
Guam         Typhoon                                    04/28/63
Hawaii       Excessive rainfall and flooding            04/14/63
Idaho        Floods                                     01/31/63
Kentucky     Severe storms and floods                   03/11/63
Nevada       Floods                                     01/29/63
Oregon       Floods                                     01/31/63
Tennessee    Severe storms and flooding                 03/11/63
Trust        Typhoon                                    04/29/63
Territory
of
Pacific
Island
Virginia     Floods                                     03/12/63
Washington   Floods                                     02/02/63
West
Virginia    Severe storms and floods                   03/05/63
Supplements I, II, and III, I.R.B.'s 1963-13, 6; 1963-16, 11;
1963-20, 15, respectively, to Revenue Ruling 63-21 superseded.
Rev. Rul. 63-21 Supp. 8
1963-2 C.B. 96
Sec. 165
Full Text
Rev. Rul. 63-21 Supp. VIII
Under section 165(h) of the Internal Revenue Code of 1954, taxpayers, who suffer a casualty loss between the close of a taxable year and the due date of their income tax returns for that year, may elect to take the deduction for that loss on the return for the immediately preceding taxable year, provided the loss is one that occurred in an area determined by the President of the United States to warrant Federal disaster assistance.
Revenue Ruling 63-21, C.B.  1963-1, 37, explains how that provision is to be applied and identified the 1962 disasters which gave rise to this special treatment.
During 1963, the President has determined that the areas listed below have been adversely affected by natural disasters of sufficient severity to warrant disaster assistance.
   State               Type of disaster           Disaster beginning
                                                     on or about--
--------------------------------------------------------------------
Arkansas     Excessive rainfall and flooding            07/12/63.
California   Excessive rainfall, floods, and severe     01/30/63.
               storms.
             Floods from break in Baldwin Hills         12/14/63.
               Dam.
Georgia      Severe storms and flooding                 03/11/63.
Guam         Typhoon                                    04/28/63.
Hawaii       Excessive rainfall and flooding            04/14/63.
Idaho        Floods                                     01/31/63.
Kentucky     Severe storms and flooding                 03/11/63.
Nebraska     Excessive rainfall and flooding            06/23/63.
Nevada       Floods                                     01/29/63.
New York     Excessive rainfall and flooding            07/29/63.
Oregon       Floods                                     01/31/63.
Tennessee    Severe storms and flooding                 03/11/63.
Texas        Hurricane                                  09/16/63.
Trust        Typhoon                                    04/29/63.
Territory
of
Pacific
Island.
Virginia     Floods                                     03/12/63.
Washington   Floods                                     02/02/63.
West
Virginia    Severe storms and flooding                 03/05/63.
Wyoming      Excessive rainfall and flooding            06/14/63.
Supplement IV, C.B. 1963-1, 39, and Supplement V, VI, and VII,
I.R.B.'s 1963-34, 7; 1963-38, 8; 1963-42, 12, respectively, to
Revenue Ruling 63-21 superseded.
Rev. Rul. 63-21 Supp. 11
1964-1 C.B. 103
Caution: Superseded by Rev. Rul. 64-332
Full Text
Rev. Rul. 63-21 Supp. XI
Under section 165(h) of the Internal Revenue Code of 1954, taxpayers, who suffer a casualty loss between the close of a taxable year and the due date of their income tax returns for that year, may elect to take the deduction for that loss on the return for the immediately preceding taxable year, provided the loss is one that occurred in an area determined by the President of the United States to warrant Federal disaster assistance.
Revenue Ruling 63-21, C.B.  1963-1, 37, explains how that provision is to be applied and identified the 1962 disasters which gave rise to this special treatment.  Disasters which occurred in 1963 that qualify for such treatment were announced in Supplement VIII, C.B. 1963-2, 96.
Section 208 of the Revenue Act of 1964, Public Law 88-272, C.B. 1964-1 (Part 2), page 6, amends section 165(c)(3) of the Code to provide that, for taxable years ending after December 31, 1963, losses of property not connected with a trade or business arising from fire, storm, shipwreck or other casualty, or from theft, are allowable only to the extent such losses exceed $100.  For purposes of the $100 limitation, a husband and wife filing a joint return for the taxable year in which the loss is allowed as a deduction are treated as one individual.  However, if separate returns are filed, each is subject to the $100 limitation.
During 1964, the President has determined that the areas listed below have been adversely affected by natural disasters of sufficient severity to warrant disaster assistance.
   State               Type of disaster           Disaster beginning
                                                     on or about--
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Alaska       Earthquakes                                03/27/64.
Arkansas     Severe storms and flooding                 03/03/64, and
                                                        04/03-05/64.
California   Seismic sea waves                          03/27/64.
Indiana      Severe storms and flooding                 03/05/64.
Kentucky     Severe storms and flooding                 03/04/64.
Missouri     Severe storms and flooding                 03/08/64.
Montana      Excessive rainfall and flooding            06/08/64.
Nebraska     Severe storms and flooding                 05/01/64.
Ohio         Severe storms and flooding                 03/04/64.
Puerto Rico  Extreme drought                            05/26/64.
Vermont      Flooding                                   03/05/64.
Virgin
Islands     Extreme drought                            06/08/64.
West
Virginia    Severe storms and flooding                 03/09/64.

Supplement X, I.R.B. 1964-17, 6, to Revenue Ruling 63-21 superseded.