Rev. Rul. 89-21
1989-1 C.B. 77, 1989-8 I.R.B. 4.
Internal Revenue Service
Revenue Ruling
LOSSES; CASUALTY; DISASTER AREAS; YEAR OF DEDUCTION
Published: February 21, 1989
26 CFR 1.165-11: Election in respect of losses attributable to a disaster.
Losses; casualty; disaster areas; year of deduction. Disaster areas in which losses during 1988 qualify for special tax treatment under section 165(i) of the Code are listed.
LAW AND ANALYSIS -- HOLDING
Under section 165(i) of the Internal Revenue Code, if a taxpayer suffers a loss attributable to a disaster occurring in an area subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Disaster Relief Act of 1974, sections 101 and 102, 42 U.S.C. sections 5121 and 5122 (1982), 1974-2 C.B. 414, then the taxpayer may elect to take a deduction for that loss on the taxpayer's federal income tax return for the taxable year immediately preceding the taxable year in which the disaster occurred.
The election to deduct for the preceding year must be made on or before the later of (1) the original due date of the taxpayer's income tax return for the year in which the disaster occurred, or (2) the due date of the preceding year's return (taking into account extensions of time for filing granted to the taxpayer). Section 1.165-11 of the Income Tax Regulations. This section of the regulations sets forth the procedures for making an election with respect to such losses.
The provisions of section 165(i) of the Code apply only to losses that are otherwise deductible under section 165(a). An individual taxpayer may deduct losses if they are incurred in a trade or business, if they are incurred in a transaction entered into for profit, or if they are casualty losses under section 165(c)(3).
As of December 12, 1988, the President had determined that the areas listed below have been adversely affected by disasters of sufficient severity occurring during 1988 to warrant disaster assistance by the Federal Government under the Disaster Relief Act of 1974.
There may be areas in which a disaster occurred during 1988 and which the President, after December 12, 1988, declares eligible for disaster assistance under the Disaster Relief Act of 1974. Information concerning these areas will be published in future issues of the Internal Revenue Bulletin, and these areas will be included in this revenue ruling when it is published in the Cumulative Bulletin.
Disaster Areas in 1988 Type of Disaster Date
Disaster
Occurred
orBegan
Alaska Fire February 10,
1988
Borough of North Slope
Arkansas Tornadoes and November
severe storms 15-20,
1988
Counties of Chicot, Clark, Columbia,
Craighead, Faulkner, Garland, Greene, Hot
Spring, Independence, Isard, Johnson,
Logan, Lonoke, Nevada, Ouachita, Phillips,
Poinsett, Prairie, Pulaski, Saline, Stone,
Van Buren, White, and Woodruff
California Severe winds,
rainstorms, high
tides, and
floodingJanuary
17, 1988
Counties of Los Angeles, Orange, San
Diego, and Santa Barbara; and the City of
San Buenaventura
Counties of Nevada, Shasta, Solano, and Wildfires September
Yuba 11-24,
1988
Guam Typhoon Roy January
11-12,
1988
Iowa Tornadoes, rains, July 15-16,
and high winds 1988
County of Pottawattamie
Marshall Islands Severe winds, high January
waves, and 9,1988
flooding
Kwajalein Atoll caused by Tropical
Storm Roy
North Carolina Tornadoes and November 28,
severe storms 1988
Counties of Currituck, Dare, Franklin,
Halifax, Hyde, Nash, Northampton, Pamlico,
and Wake
Northern Mariana Islands Typhoon Roy January
11-12,
1988
Island of Rota
Texas Hurricane Gilbert September
and resulting 15-17,
tornadoes 1988
Counties of Bexar, Cameron, and Hidalgo
DRAFTING INFORMATION
The principal author of this revenue ruling is Karl A. La Cour of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. La Cour on (202) 566- 6438 (not a toll-free call).
Rev. Rul. 89-21, 1989-1 C.B. 77, 1989-8 I.R.B. 4.