REVENUE RULE 90-10

Rev.Rul. 90-10, 1990-1 C.B. 42, 1990-6 I.R.B. 6.

Internal Revenue Service
Revenue Ruling

LOSSES; CASUALTY; DISASTER AREAS; YEAR OF DEDUCTION

Published: February 5, 1990

Section 165. - Losses, 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 for 1989 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 and Emergency Assistance Act, Pub. L. No. 100-707, sections 101 thru 113, 102 Stat. 4689 (1988) (formerly the Disaster Relief Act of 1974, sections 101 and 102, 42 U.S.C. sections 5121 and 5122 (1982), 1974-2 C.B. 414), 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 29, 1989, the President had determined that the areas listed below have been adversely affected by disasters of sufficient severity occurring during 1989 to warrant disaster assistance by the Federal Government under the Disaster Relief and Emergency Assistance Act.

There may be areas in which a disaster occurred during 1989 and which the President, after December 29, 1989, declares eligible for disaster assistance under the Disaster Relief and Emergency Assistance Act. 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 1989

Alabama:
Madison County
Type of Disaster: Tornadoes and severe storms
Date Disaster Occurred or Began: November 15, 1989

Alaska:
Communities of Akiachak, Akhiok, Alakanuk, Allakaket, Anvik, Artic Village, Beaver, Birch Creek, Chevak, Chignik, Eagle Village, Ekwok, Ester, Fort Yukon, Galena, Gamble, Golovin, Grayling, Hyder, Karluk, Kokhanok, Kongiganek, Koyukuk, Levelock, Lime Village, Lower Kalskag, Manokotak, Minto, Mountain Village, New Stuyahok, Nicolai, Sandpoint, Seldovia, Slana, Sleetmute, St. George, St. Michael, Takotna, Tanana, Tattilek, Telida, Tetlin, Thorne Bay, Togiak, Tununak, Venetie, and Whale Pass; and The Northwest Artic Borough
Type of Disaster: Severe freezing
Date Disaster Occurred or Began: January 15-February 15, 1989

All political jurisdictions and Alaska native villages along the Yukon and Kuskowim Rivers and associated tributaries
Type of Disaster: Severe flooding
Date Disaster Occurred or Began: May 1-June 10, 1989

California:
Counties of Alameda, Contra Costa, Marin, Monterey, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz, and Solano; and Cities of Isleton, San Francisco, and Tracy
Type of Disaster: Earthquake and aftershocks
Date Disaster Occurred or Began: October 17, 1989

Connecticut:
Counties of Litchfield and New Haven
Type of Disaster: Thunderstorms, tornadoes, and severe winds
Date Disaster Occurred or Began: July 10, 1989

District of Columbia:
The District of Columbia
Type of Disaster: Severe storms and high winds
Date Disaster Occurred or Began: June 14-15, 1989

Illinois:
Counties of Edwards, Hamilton, Wabash, Wayne, and White
Type of Disaster: Severe storms and tornadoes
Date Disaster Occurred or Began: January 7, 1989

Kentucky:
Counties of Anderson, Ballard, Berry, Bourbon, Boyd, Breathitt, Bullitt, Butler, Caldwell, Carlisle, Casey, Christian, Edmonson, Elliott, Floyd, Franklin, Graves, Grayson, Greenup, Hardin, Harrison, Hart, Henry, Hickman, Hopkins, Jackson, Jessamine, Johnson, Knott, Knox, Lawrence, Larue, Lee, Leslie, Letcher, Magoffin, Marshall, Martin, McClean, McCracken, Mercer, Morgan, Muhlenberg, Nelson, Nicholas, Ohio, Owen, Owsley, Pendelton, Perry, Pike, Rockcastle, Rowan, Trigg, Trimble, Washington, Woodford and Wolfe
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: February 13-March 8, 1989

Counties of Bell, Breathitt, Clay, Floyd, Knott, Knox, Leslie, Letcher, Magoffin, Owsley, Pike, and Whitley
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: June 15-July 6, 1989

Counties of Clay, Floyd, Jackson, Knott, Knox, Leslie, Letcher, Magoffin, Owsley, Perry, and Pike
Type of Disaster: Severe storms, flooding, and mudslides
Date Disaster Occurred or Began: October 16-18, 1989

Louisiana:
Parishes of Acadia, Allen, Beauregard, Bienville, Caddo, Calcasieu, Caldwell, Claiborne, East Feliciana, Franklin, Grant, Jackson, LaSalle, Lincoln, Madison, Morehouse, Natchitoches, Ouachita, Red River, Richland, Sabine, St. James, St. Landry, St. Martin, Union, Vermilion, Vernon, Webster, West Carroll, and Winn
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: May 4-27, 1989

Parishes of Beauregard, East Baton Rouge, Iberville, Livingston, St. Helena, Tangipoa, Vernon, and West Baton Rouge
Type of Disaster: Severe thunderstorms and tornadoes
Date Disaster Occurred or Began: June 7-8, 1989

Parishes of Allen, Beauregard, Bienville, Bossier, Calcasieu, East Baton Rouge, Grant, Iberville, Jefferson Davis, Lafayette, Natchitoches, Pointe Coupee, Rapides, Sabine, St. Landry, Vermilion, Vernon, Webster, and Winn
Type of Disaster: Tropical Storm Allison
Date Disaster Occurred or Began: June 25-July 21, 1989

Parishes of Jefferson, Orleans, and St. Charles
Type of Disaster: Heavy rains and flooding
Date Disaster Occurred or Began: November 7-9, 1989

Maine:
Counties of Androscoggin, Cumberland, Franklin, and Oxford
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: May 5-13, 1989

Maryland:
Montgomery County
Type of Disaster: Severe storms and high winds
Date Disaster Occurred or Began: June 14-15, 1989

Minnesota:
Counties of Clay, Marshall, Norman, Pennington, Polk, Traverse, and Wilkin
Type of Disaster: Flooding
Date Disaster Occurred or Began: March 29-May 8, 1989

North Carolina:
Counties of Anson, Catawaba, Cleveland, Davidson, Davie, Durham, Forsyth, Granville, Guilford, Iredell, Lincoln, Rutherford, and Union
Type of Disaster: Tornadoes
Date Disaster Occurred or Began: May 5-6, 1989

Counties of Alexander, Alleghany, Anson, Ashe, Avery, Brunswick, Burke, Cabarrus, Caldwell, Catawba, Cleveland, Davidson, Davie, Forsyth, Gaston, Guilford, Iredell, Lincoln, Mecklenburg, Montgomery, Richmond, Rowan, Stanly, Stokes, Surry, Union, Watauga, Wilkes, and Yadkin
Type of Disaster: Hurricane Hugo
Date Disaster Occurred or Began: September 21-22, 1989

North Dakota:
Counties of Cass, Grand Fords, Pembina, Richland, Traill, and Walsh
Type of Disaster: Flooding
Date Disaster Occurred or Began: March 29-May 6, 1989

Ohio:
Counties of Butler, Coshocton, Cuyahoga, Franklin, Geauga, Greene, Lake, Licking, Lorain, Mercer, Montgomery, Preble, and Warren
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: May 23-June 26, 1989

Puerto Rico:
Municipios of Adjuntas, Aibonita, Aguas Buenas, Arecibo, Arroyo, Barceloneta, Barranquitas, Bayamon, Caguas, Camuy, Canovanas, Carolina, Catano, Cayey, Ceiba, Ciales, Cidra, Coamo, Comerio, Corozal, Culebra, Dorado, Fajardo, Florida, Guayama, Guaynabo, Gurabo, Hatillo, Humacao, Jayuya, Juncos, Lares, Las Piedras, Loiza, Luquillo, Manati, Maunabo, Morovis, Naguabo, Naranjito, Orocovis, Patillas, Penuelas, Ponce, Rio Grande, Salinas, San Juan, San Lorenzo, Toa Alta, Toa Baja, Trujillo Alto, Utuado, Vega Alta, Vega Baja, Viegues, Villalba, and Yabucoa
Type of Disaster: Hurricane Hugo
Date Disaster Occurred or Began: September 17-18, 1989

South Carolina:
Counties of Berkeley, Calhoun, Charleston, Chester, Chesterfield, Claredon, Colleton, Darlington, Dillon, Dorchester, Farfield, Florence, Georgetown, Horry, Kershaw, Lancaster, Lee, Marion, Marlboro, Organgeburg, Richland, Sumter, Williamsburg, and York
Type of Disaster: Hurricane Hugo
Date Disaster Occurred or Began: September 21-22, 1989

Texas:
Counties of Cass, Cherokee, Gregg, Harrison, Houston, Marion, Panola, Smith, and Rusk
Type of Disaster: Severe thunderstorms and flooding
Date Disaster Occurred or Began: March 28-29, 1989

Counties of Anderson, Angelina, Archer, Baylor, Bell, Blanco, Bosque, Brown, Burnet, Cass, Cherokee, Clay, Collin, Comanche, Cooke, Coryell, Dallas, Denton, Donley, Ector, Ellis, Fannin, Grayson, Gregg, Hale, Hall, Hardin, Harris, Harrison, Henderson, Hill, Hood, Houston, Howard, Hutchinson, Jack, Jasper, Jefferson, Johnson, Kaufman, Knox, Lamar, Leon, Liberty, Limestone, Lubbock, Marion, Mason, McCulloch, McLennan, Montague, Montgomery, Nacogdoches, Navarro, Newton, Ochiltree, Orange, Palo Pinto, Panola, Parker, Pecos, Polk, Potter, Randall, Red River, Rockwall, Rusk, Sabine, San Augustine, San Jacinto, Shelby, Sherman, Smith, Somervell, Tarrant, Taylor, Titus, Trinity, Tyler, Upshur, Van Zandt, Walker, Walter, Williamson, Wise, Wichita, and Young
Type of Disaster: Severe storms, tornadoes, and flooding
Date Disaster Occurred or Began: May 4-June 15, 1989

Counties of Hardin, Harris, Jasper, Jefferson, Liberty, Newton, Orange, San Jacinto, and Tyler
Type of Disaster: Tropical Storm Allison
Date Disaster Occurred or Began: June 25-July 7, 1989

United States Territory of the Virgin Islands
The Virgin Islands of St. Croix, St. John, St. Thomas, Water Island, and other inhabited islands under the jurisdiction of the Territorial Government
Type of Disaster: Hurricane Hugo
Date Disaster Occurred or Began: September 17-18, 1989

Utah:
Washington County
Type of Disaster: Flash flooding
Date Disaster Occurred or Began: January 1, 1989

Vermont:
Counties of Addison, Caledonia, Essex, Orange, and Washington
Type of Disaster: Severe storms and flooding
Date Disaster Occurred or Began: August 4-5, 1989

Virginia:
Buchanan County
Type of Disaster: Severe storms, flooding, and mudslides
Date Disaster Occurred or Began: October 16-17, 1989

Washington:
Counties of Douglas, Okanogan, Stevens, and Whitman
Type of Disaster: Flooding and mudslides
Date Disaster Occurred or Began: March 8-17, 1989

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. 90-10, 1990-1 C.B. 42, 1990-6 I.R.B. 6.