LOSS VALUATION - COST OF REPAIRS METHOD FAQs

LOSS VALUATION - COST OF REPAIRS METHOD FAQs

The IRS has addressed some thorny issues related to disaster casualty losses in a quick manner using the concept of “FAQa” or Frequently Asked Questions.

Here are 13 that appear on the IRS website. At present they are available at:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/FAQs-for-Disaster-Victims-Casualty-Loss-%28Valuations-and-Sections-165-%28i%29%29

This web URL is the current one at this time (January 2013). It changed recently.

Some of these FAQs are very useful and many clear up issues related to small groups of taxpayers that are sometimes overlooked as the audience is small.

In some cases the IRS response is very important to large groups of taxpayers. Search this blog for the following entry:

VERY IMPORTANT! - ABSOLUTE REQUIREMENT

FOR USING THE COST OF REPAIRS METHOD OF COMPUTING LOSS

(ANOTHER REASON FOR NOT USING THE COST OF REPAIRS METHOD

IN LARGE DISASTER LOSSES)

The titles in bolded RED at the top of each question are additions supplied by the author of the blog.

IRS Frequently Asked Questions, Casualty Loss (Valuations and Sections 165(i))

IRS ADMITS THAT CASUALTY LOSS REPORTING IS DEFECULT

(6/1/07) Q: A number of concerns have been raised by taxpayers and tax professionals about casualty loss valuations. While the IRS continues to research and develop specific answers to these issues, general guidance follows below. A: While we cannot address every question received about property valuation issues, the IRS wants to express to the public that we sincerely recognize the extraordinary damage that can be caused by disasters. We urge taxpayers and tax professionals to act in good faith and make reasonable estimations based on all information available. The IRS is committed to considering each situation on a case-by-case basis. We have extensive experience with disaster situations and will be reasonable in determinations. As for lost records, when records are not available or it is not feasible to obtain documentation sufficient to re-create records otherwise required, the IRS will consider documentation requirements satisfied by the best reasonably available information presented in good faith.

COMPUTATION OF REAL ESTATE PROPERTY CASUALTY LOSS DEDUCTIONS USING THE COST OF REPAIRS METHOD AS THE MEASUR OF DETERMINING THE LOSS BUT SEE:

(6/1/07) Q: The reporting of casualty losses on Form 4684 is cumbersome when using the repairs as evidence of the loss. You must reduce the value of the property after the loss by the amount of the repairs paid out to get the form to compute correctly. A: Under the law, a personal casualty loss is determined by taking the smaller of: ·                The cost or other basis of the property (reduced by any insurance reimbursement), or ·                The decline in fair market value of the property as measured immediately before and after the casualty (reduced by any insurance reimbursement). The cost of repairs may, in certain cases, be used to measure the decline in fair market value, but it cannot be used by itself to determine the amount of the loss. When the cost of repairs is determined to be a fair measure of the decline in fair market value, then all you have to do is take the fair market value before the casualty and reduce it by the cost of repairs to arrive at the fair market value after the casualty. Suggestions for redesign of the form to make the computation less cumbersome and still follow the law are welcome and may be submitted at the Comments on Tax Forms and Publications page, or you may write to: Internal Revenue Service, Individual Forms and Publications Branch, SE:W:CAR:MP:T:I, 1111 Constitution Ave. NW IR 6406, Washington, DC 20224.

FAIR MARKET VALUE IMMEDIATELY AFTER LOSS EVENT

(6/1/07) Q: Section 1.165-7(b)(1)(i) indicates the decrease in fair market value is the difference between the property's value immediately before and immediately after the casualty. What constitutes "immediately after"? A: To compute the deductible casualty loss, taxpayers need to determine: (1) the difference between the fair market value immediately before and immediately after the casualty; and (2) the adjusted basis of the property (usually the cost of the property and improvements). Taxpayers may deduct the smaller of these two amounts minus insurance or any other form of compensation received or expected to be received. One method of determining the decrease in fair market value is an appraisal. An appraisal must reflect only the physical damage to the property and not a general decline in the property's fair market value. See §1.165-7(a)(2)(i) of the Income Tax Regulations. Taxpayers may also use the cost to repair or clean up the property (cost-of-repairs method) to determine the decrease in fair market value caused by the casualty. See §1.165-7(a)(2)(ii). Although the regulations use the term "immediately after" when referring to the post-casualty value, we recognize that taxpayers' ability to determine the decrease in the fair market values of their properties, as a result of a disaster, may be restricted by lack of access to the properties and the need to remove water from flooded properties. Under these circumstances, the decrease in fair market value would take into account additional damage sustained to the property as a result of delays due to legal and physical restrictions to taxpayers' access to their property and the need to remove standing water from the properties.

MULTIPLE PROPERTIES LOST IN A SINGLE DISASTER ELECTION TO REPORT LOSS ON PRIOR YEAR RETURN

(03/09) Q: If a taxpayer owns several parcels of real estate that are damaged by a federally declared disaster, may the taxpayer elect under §165(i) to claim a casualty loss on one property in the prior year and a casualty loss on other property in the current year? A: If a taxpayer elects under §165(i) to deduct in the prior tax year losses attributable to a federally declared disaster, the taxpayer must report all related losses that qualify for the election on the prior year tax return (original or amended). See §1.165-11(d) of the Income Tax Regulations.

COMMON OWNERSHIP INTERESTS CONDOS AND CO-OPS

(6/1/07) Q: A homeowners/condo association sustained a loss from a disaster and made a special assessment on owners to replace uninsured property. May the homeowners claim the special assessment as a casualty loss? A: The answer depends on whether the damaged property was owned by the homeowners association or by the individual members as tenants in common. A homeowners association (including a condominium association) is organized and operated for the purpose of acquiring, constructing, managing, and maintaining "association property." Such property includes real and personal property owned by the organization or owned as tenants in common by the members of the organization. This property is generally referred to as "common elements." Funds for performance of the activities of the homeowners association are generally derived from assessments of the members and the assessments include real property taxes on association property as well as reserves for capital items such as resurfacing a parking lot, replacement of street lights, construction of a swimming pool, etc. This would include special assessments for any uninsured portion of the cost of repair or replacement of property damaged by a natural disaster. A casualty loss deduction is only allowed for losses from property owned by the taxpayer. If the common elements are not owned by individual members, but rather by the homeowners association, an individual member would not be entitled to a casualty loss deduction. A member's assessment for the replacement of a capital item, whether or not the item was damaged by a casualty, is in the nature of a contribution to the capital of the homeowners association and is not currently deductible by the member. However, if the individual members of the homeowners association own the common elements as tenants in common, the individual members may be entitled to casualty loss deductions in proportion to each member's interest in the damaged common elements. To compute the amount of a casualty loss, a taxpayer must determine the fair market value of the property both immediately before and immediately after the casualty and compare the decrease in fair market value with the adjusted basis in the property. From the smaller of these two amounts, a taxpayer must subtract any insurance or other form of compensation they have received or reasonably expect to receive. Fair market value may be determined by an appraisal. The cost to repair or clean up the property (cost-of-repairs method) may also be used as a measure of the decrease in fair market value caused by the casualty if the repairs are actually made, are not excessive, are necessary to bring the property back to its condition before the casualty, take care of the damage only, and do not cause the property to be worth more than before the casualty. See Regulations §1.165-7(a)(2). If the members own the common elements damaged by the casualty as tenants in common, they are entitled to a casualty loss deduction for the lesser of: (1) the decline in value of their ownership interest as a result of the casualty or (2) their adjusted basis. From the smaller amount, the member should subtract any insurance or other form of compensation received or expected to be received. With respect to a member claiming the special assessment as a casualty loss, a member could use the amount of the assessment as a measure of the decrease in the fair market value of the common elements caused by the casualty as long as the amount of the assessment is commensurate with the member's ownership interest in the common elements and the requirements for using the cost-of-repairs method of valuation, described above, are satisfied. In summary, if the common elements are owned by the homeowners association, the members are not entitled to any casualty loss deduction for damage to the common elements and, therefore, the members may not deduct a special assessment to replace uninsured property (common elements) damaged by a disaster. However, if the common elements are owned by the members of the homeowners association as tenants in common, the members may be entitled to a casualty loss deduction as discussed above.

LOSSES TO LANDSCAPING ONLY OR OTHER “SINGLE ELEMENT” APPRAISAL ISSUES – LOSS CALCULATION

(6/1/07) Q: How does a taxpayer determine a casualty loss from damaged trees and other landscaping on personal-use residential property when that loss is attributable to a disaster? A: In determining the amount of a casualty loss from damage to personal-use residential property, trees and other landscaping are considered part of the entire residential property, and are not valued separately or assigned a separate basis, even if purchased separately. To compute your casualty loss: 1.              Determine your adjusted basis in the entire residential property before the casualty. Your basis is generally the cost of the property, adjusted for improvements and certain other events. For more information on determining your adjusted basis, see Publication 530, Tax information for First-Time Homeowners, and Publication 551, Basis of Assets. 2.              Determine the decrease in fair market value of the entire residential property as a result of the casualty. 3.              From the smaller of these two amounts, subtract insurance and any other form of compensation received or expected to be received. For residential property, damaged and destroyed trees and other landscaping may adversely affect the fair market value of the entire property by reducing the curb or overall appeal of the property. One method of determining the decrease in fair market value is to compare an appraisal of the entire residential property, including trees and other landscaping, before the damage caused by the casualty to an appraisal of the entire residential property after the damage caused by the casualty, including damage to trees and other landscaping. Valuation of the damage to a tree by an arborist does not determine the decrease in fair market value of the entire property. Alternatively, the cost of cleaning up and restoring the residential property, including trees and other landscaping, to its condition before the casualty may be used as evidence of the decrease in fair market value, if the clean-up, repairs, and restoration are actually done, are not excessive, are necessary to bring the property back to its condition before the casualty, take care of the damage only, and do not cause the property to be worth more than before the casualty. For example, if these requirements are satisfied, the cost of removing destroyed or damaged trees (minus any salvage received), pruning and other measures taken to preserve damaged trees, and replanting necessary to restore the property to its approximate value before the casualty may be acceptable as evidence of the decrease in fair market value caused by the casualty. You may not include in your cost of cleaning up and restoring your property the cost of purchasing any capital asset, such as a compact loader or tractor, or the value of the time you spend cleaning up your own property. The following examples illustrate the points discussed above: Example 1: A taxpayer lost a large tree in her backyard due to a disaster, but sustained no other property damage. An arborist valued the damage to the tree at $3,000. The taxpayer spent $600 to remove the tree from the yard and grind the stump. Insurance paid $500 for debris removal. The value of the damage to the tree determined by the arborist does not qualify as a measure of the casualty loss because it does not reflect the decrease in the fair market value of the residential property as a whole, including the residence, land, and improvements. The taxpayer may obtain an appraisal of the entire property to determine any decrease in value resulting from the loss the tree. Alternatively, the taxpayer may use costs incurred to clean up and to remove the tree as a measure of the decrease in the fair market value of the property provided the costs are not excessive, are necessary to bring the property back to its condition before the casualty, take care of the damage only, and do not cause the property to be worth more than before the casualty. The taxpayer would subtract from the loss any insurance reimbursement for tree removal and clean-up expenses. Under this alternative, the taxpayer has a casualty loss of $100. Example 2: A taxpayer had a large tree that fell during a disaster and crushed a carport. Among many trees on the property, it was the only tree that was damaged. The loss of this tree does not affect the fair market value of the entire property. Homeowners’ insurance reimbursed the taxpayer all costs for repairing the carport and removing the tree. Insurance paid for all repair costs to bring the property back to its pre-casualty condition and value. Therefore, the taxpayer has no casualty loss. For more information on casualty losses, see Publication 547, Casualties, Disasters & Thefts.

LOSSES FULLY INSURED

(6/1/07) Q: A taxpayer's residence is damaged by a disaster. Prior to the disaster the taxpayer's basis in the property was $100,000. The taxpayer receives insurance proceeds of $10,000 for the damage (not for living expenses), but only spends $7,500 for repairs necessary to restore the residence to its condition before the hurricane. The taxpayer receives no other form of compensation for the damage. Does the taxpayer have a casualty loss deduction? Is the difference of $2,500 between the insurance recovery and the repair cost taxable? What is the adjusted basis of the residence after the repairs? A: The taxpayer does not have a casualty loss deduction, because the loss is fully covered by insurance. To compute a casualty loss deduction, a person must: 1.              Determine the adjusted basis in the property before the casualty. 2.              Determine the decrease in fair market value of the property as a result of the casualty (generally by appraisal or using the cost-of-repairs method). 3.              From the smaller of these two amounts, subtract insurance and any other form of compensation received or expected to be received. See Publication 547, Casualties, Disasters, and Thefts. In this case, using the cost-of-repairs method to measure the decrease in value caused by the hurricane, the taxpayer sustained a casualty loss of $7,500—the lesser of the $100,000 basis in the residence and the $7,500 cost of repairs. However, since the $10,000 in insurance exceeds the casualty loss, the taxpayer may not claim a casualty loss deduction on the taxpayer's federal income tax return. The mere fact that the insurance proceeds exceed the cost of repairs does not in and of itself result in taxable income to the taxpayer. Any gain from a casualty is determined by the amount of insurance proceeds and any other form of compensation received or expected to be received in excess of the amount of the taxpayer's adjusted basis in the damaged property prior to the casualty. In this example, the taxpayer would not recognize any gain because the amount of the insurance proceeds is less than the taxpayer's pre-disaster basis in the residence. To determine the new basis in the residence, the taxpayer adjusts the pre-disaster basis by taking into account adjustments that decrease basis and adjustments that increase basis. Casualty loss deductions and compensation for the damage (for example, insurance proceeds) both decrease basis. See Publication 551, Basis of Assets, page 5. Note, however, that in this case the taxpayer does not have an allowable casualty loss deduction, so the casualty loss does not affect the taxpayer's basis. The $10,000 insurance payment reduces the taxpayer's basis in the residence. The $7,500 spent on repairs to restore the residence to its condition before the disaster increases the taxpayer's basis in the residence. Thus, in this situation, the taxpayer's new basis of the residence is the taxpayer's pre-disaster basis reduced by the $2,500 difference between the insurance proceeds received and the cost to repair the damage, and is computed as follows: New Basis Calculation Basis before casualty             $100,000 Less casualty loss deduction            0 Less insurance received         $ 10,000 Net basis calculation             $ 90,000 Plus repairs                      $  7,500 Basis after casualty              $ 97,500 For more information on computing adjusted basis, see Publication 530, Tax information for First-Time Homeowners.

MOLD LOSSES

(6/1/07) Q: How will the IRS handle water damage "mold issues" as a result of insufficient repairs or whatever the cause. Will there be special reporting on the loss related to mold? A: Whether individuals may claim damage to their personal-use property from mold as part of a casualty loss depends on the facts and circumstances of each situation. A key factor to consider is whether the mold damage occurred as a direct result of the disaster or from some other intervening cause since there must be a causal connection between the casualty event and the loss claimed by the taxpayer. For example, individuals would not be entitled to deduct as part of their casualty loss mold damage that occurred as a result of insufficient repairs. The individuals' casualty loss deduction would be limited to the property damage caused by the disaster. In addition, if a large amount of time lapsed between the date of the hurricanes and the formation of the mold, this raises the question of whether the mold damage was caused by the disaster or by some other factor. The formation of mold may qualify as a separate casualty. A casualty is an event that is identifiable, damaging to property, and sudden, unexpected, and unusual in nature. An event is sudden if it is swift and precipitous, and not gradual or due to progressive deterioration of property through a steadily operating cause. An event is unexpected if it is unanticipated and it occurs without the intent of the one who suffers the loss. An event is unusual if it is extraordinary and nonrecurring, one that does not commonly occur during the activity in which the taxpayer was engaged when the destruction or damage occurred and one that does not commonly occur in the ordinary course of day-to-day living of the taxpayer. If, under a particular set of facts, the formation of mold is a sudden, unexpected, unusual and identifiable event that caused damage to the individual's property, then it would qualify as a casualty and the individual may be entitled to deduct the loss for the resulting property damage as a casualty loss under section 165(c)(3) if the individual satisfies the other requirements for the deduction.

BUSINESS LOSSES ARE DIFFERENT FROM PERSONAL LOSSES

(11/03/2006) Q: A business building has adjusted basis of $40,000 ($30,000 building and $10,000 land). Building in 50% destroyed. Insurance is $10,000. Cost to repair is $85,000. What is the amount of the taxpayer’s casualty loss deduction? A: If the business property was damaged but not totally destroyed, the casualty loss is measured by the lesser of the adjusted basis or the decrease in fair market value, minus any other form of compensation (such as insurance reimbursement). Section 1.165-7(a)(2) of the Income Tax Regulations provides two methods for taxpayers to determine the decrease in fair market value of the property affected by a casualty. The first method is an appraisal. An appraisal must reflect only the physical damage to the property and not a general decline in the property’s fair market value. See §1.165-7(a)(2)(i). The second method is the cost to repair the property. See §1.165-7(a)(2)(ii). The cost to repair the damaged property may be used as evidence of the decrease in value if the taxpayer makes the repairs and shows that the repairs: a. are necessary to bring the property back to its condition before the casualty; b. the amount spent for repairs is not excessive; c. the repairs take care of the damage only; and d. the value of the property after the repairs is not, as a result of the repairs, more than the value of the property before the casualty. Since the property is used in a trade or business, the casualty loss deduction must be computed based on each single identifiable property based on §1.165-7(b)(2)(i). Therefore, the taxpayer must compute the loss deduction with respect to the building separately. If the taxpayer satisfies all of the requirements for the cost of repairs method, then the casualty loss would be measured by comparing the decrease in fair market value (as evidenced by the cost of repairs) to the adjusted basis of the building. The casualty loss with respect to the building would be the lesser of the decrease in fair market value of the building or the adjusted basis of the building, reduced by insurance compensation. The deductible casualty loss for the building would be $20,000, computed by using $30,000, which is the lesser of the decrease in fair market value of the building ($85,000) (we are assuming that the $85,000 reflects only the cost to repair the building) or the adjusted basis of the building ($30,000) and subtracting from $30,000 the insurance payment of $10,000 (assuming that the $10,000 insurance compensation covered the loss of the building only). The casualty loss must be computed separately for any other improvements to the property. ·                What is the taxpayer’s basis in the building? Response: The taxpayer’s basis in the damaged building is reduced by the amount of the insurance proceeds received and the amount of the allowable casualty loss deduction attributable to the damaged building. ·                If the taxpayer repairs the partially destroyed building, how do the repair costs affect the computation of the taxpayer’s basis in the building? Response: If the taxpayer repairs the damaged building, the cost of the repairs ordinarily is capitalized and added to the taxpayer’s tax basis in the damaged building. ·                What is the authority for the basis information described above? Response: Sections 1012 and 1016 of the Internal Revenue Code.Section 1012 provides, generally, that the basis of property is its cost to the taxpayer. Section 1016 requires that proper adjustment be made to the basis of property for expenses, receipts, losses, or other items properly chargeable to capital account.

IRS DOES NOT HAVE AN AUDIT GUIDE FOR PREPARING FOR AN AUDIT!

(12/15/09) Q. Is there an audit technique guide to assist in the preparation of casualty losses? A: No, but there is other IRS-issued guidance to help taxpayers determine and report disaster-related casualty losses. See, Publication 584, Casualty, Disaster and Theft Loss Workbook. Also see, Internal Revenue Manual Section 4.10.7.3, Evaluating Evidence, and Section 4.10.7.4, Arriving at Conclusions.

VERY IMPORTANT! - ABSOLUTE REQUIREMENT FOR USING THE COST OF REPAIRS METHOD OF COMPUTING LOSS (ANOTHER REASON FOR NOT USING THE COST OF REPAIRS METHOD IN LARGE DISASTER LOSSES)

(12/15/09) Q. According to Treas. Reg. 1.165-7(a)(2)(ii), the cost of making repairs to restore property to its original condition can be used as a measure of the decrease in the FMV of the property. If the repairs have not yet been made but the taxpayer received an estimated cost of the repairs, can the taxpayer report the estimated cost on the taxpayer’s return. A: No. To be able to use the cost of repairs method to determine the decrease in FMV of a property, the repairs must have been made by the due date of the tax return. If the repairs have not been made, the taxpayer should file the return without reporting the casualty loss information. After the repairs have been made, the taxpayer may file an amended return.

SAY GOOD BYE TO THE “RED INK” INDICATION OF THE DISASTER AT THE TOP OF YOUR TAX RETURN

(12/15/09) Q. Previously, taxpayers who were affected by a federally declared disaster were instructed to write, in red ink, at the top of the Form 1040, information that identifies the particular disaster. Today, many taxpayers file electronically. Taxpayers who file electronically cannot enter information in “red ink” on the Form 1040. Is it acceptable that taxpayers who file electronically identify the disaster in “black ink” at the top of the Form 1040? A: It is acceptable to put a statement in black ink at the top of the Form 1040. However, the Federal Emergency Management Agency (FEMA) notifies the IRS of the counties affected by a federally declared disaster. By entering the FEMA-supplied information into its computers, the IRS can systemically identify affected taxpayers. Only those affected taxpayers who are required to self identify (because their principal residence is not located in the covered disaster area) are required to enter information identifying the disaster on the Form 1040.

INSURANCE COMPANY “FLAT AMOUNT” PAYMENTS FOR FOOD SPOILAGE

(12/15/09) Q. During a recent disaster many taxpayers lost food stored in refrigerators and freezers due to long periods without electricity. Many insurance companies reimbursed policyholders a flat amount for food losses, without requiring the policyholders to itemize the food losses or file claims. If the amount the taxpayer received from the insurance company exceeded the original cost of the food, does the taxpayer have a reportable gain? A: No. Section 1033(h)(1)(A)(i) of the Code states that no gain shall be recognized by reason of the receipt of any insurance proceeds for personal property which was part of such contents and which was not scheduled property for purposes of such insurance.

USING THE AMOUNT REPORTED ON YOUR PROPERTY TAX BILL AS A MEASURE OF THE FAIR MARKET VALUE OF YOUR PROPERTY NOT A VALID MEASURE OF FAIR MARKET VALUE FOR CASUALTY LOSS COMPUTATIONS

(12/15/09) Q. Can an affected taxpayer use the value of their property as stated their most recent property tax statement to establish the FMV of the property before the casualty? A: No. The law allows the taxpayer to establish the FMV of the property before the casualty by either: (1) obtaining an appraisal from a competent appraiser (see Reg. 1.165-7(a)(2)(i)); or (2) by using the cost of repairs method (see Reg. 1.165-7(a)(2)(ii)). The IRS will review each return based on the particular facts and circumstances.

MAJOR LOSS TO OCEAN FRONT RENTAL WHEN TO REPORT INSURANCE PROCEEDS GAIN WHAT ABOUT “SUSPENDED PASSIVE LOSSES?”

(12/15/09) Q. Taxpayer's beach front rental property was totally destroyed as a result of a hurricane that occurred in 2008. The taxpayer then decided not to rebuild. After the hurricane, the County Tax Assessor valued the property at $100. The taxpayer received insurance proceeds in 2009 that resulted in a gain. The taxpayer, who had been reporting income and expenses on Schedule E, has suspended losses. Is the taxpayer required to report the gain in 2008 or 2009? Is the taxpayer required to consider the property as disposed of and take the suspended losses? If so, are these losses reported on the 2008 or 2009 return? A: The gain that results from the casualty must be reported in the year in which the insurance proceeds were received. Therefore, in the example above, the taxpayer should report the gain in 2009. See IRS Notice 90-21, 1990-1 C.B. 332. Pursuant to section 469(g) of the Code, losses are allowed, without limitation, if the taxpayer disposes of the entire interest in the activity to an unrelated person in a fully taxable transaction. Generally, this rule does not apply unless the taxpayer disposes of all of the assets used in the activity (including land). Because the taxpayer in the example above has not disposed of the land, the taxpayer may only take passive activity losses up to the amount of the taxpayer's passive income in 2008. Any suspended losses not allowed would carryover to 2009. Page Last Reviewed or Updated: October 18, 2012

All rights to reproduce or quote any part of the chapter in any other publication are reserved by the author. Republication rights limited by the publisher of the book in which this chapter appears also apply.

	JOHN TRAPANI
	Certified Public Accountant
	2975 E. Hillcrest Drive #403
	Thousand Oaks, CA 91362
	(805) 497-4411       E-mail John@TrapaniCPA.com
	Website: www.TrapaniCPA.com
	Blog: www.AccountantForDisasteRrecovery.com
	It All Adds Up For You

This material was contributed by John Trapani. A Certified Public Accountant who has assisted taxpayers since 1976, in analyzing and reporting transactions of the type covered in this material.  

Internal Revenue Service Circular 230 Disclosure

This is a general discussion of tax law. The application of the law to specific facts may involve aspects that are not identical to the situations presented in this material. Relying on this material does not qualify as tax advice for purpose of mounting a defense of a tax position with the taxing authorities

The analysis of the tax consequences of any event is based on tax laws in effect at the time of the event.

This material was completed on the date of the posting

© 2, John Trapani, CPA,