NAPA
VALLEY EARTHQUAKE OF AUGUST 24, 2014 – DISASTER DECLARATION - (FEMA: DR 4193)
On September
11, 2014, the President declared the August 24, 2014, Napa Valley Earthquake a
federal disaster (FEMA number DR 4193). The declaration did not include any
financial assistance, at this time, being made available to individuals or businesses.
However, the mere declaration of the incident as a Federal Disaster opens up
the federal Income Tax Code provisions applicable to disasters to individuals
and busineees.
Internal
Revenue Code section 165(h)(3) “SPECIAL
RULE FOR LOSSES IN FEDERALLY DECLARED DISASTERS” state in subparagraphs (C)(i)
and (C)(ii), the definitions or a “FEDERALLY
DECLARED DISASTER”
for purposes of the availability of the special sections of the Internal
Revenue Code to taxpayers who experience
a major disaster and defines a “DISASTER
AREA” for purposes of
applying the special benefits of the Tax Code applicable to declared federal
disasters:
165(h)(3)(C)(i) FEDERALLY
DECLARED DISASTER.— The term
"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.
165(h)(3)(C)(ii) DISASTER
AREA.— The term "disaster area" means
the area so determined to warrant such assistance.
Once
the President makes the “Declaration” the Internal Revenue Code’s special
sections become available to taxpayers.
DON’T RUSH TO
DEDUCT… BUT DON’T IGNORE THE POSSIBLE BENEFITS EITHER
One of
the considerations that taxpayers who have not yet filed their 2013 income tax
returns should consider before the October 15th extension due date
is the possibility of claiming a loss on their 2013 tax return as permitted in
these circumstances. Taxpayer who file their returns on an annual basis have
until April 15, 2015 to make a final decision regarding claiming the loss on
their 2013 tax return, but they may want to claim the benefits now.
Claiming
a disaster (casualty) loss deduction is not a decision that should not be taken
lightly. Claiming a disaster (casualty) loss tax deduction should be claimed
only once all the facts are tied down.
There are
a number of entries on this blog that should be consulted to understand the
process and implications of claiming a deduction. A knowledgeable tax
professional should be contacted to discuss the details of your circumstances.
Many facts will be important to understand before a decision can be made.
JOHN TRAPANI assists both
taxpayers directly and advises taxpayers’ tax professionals.
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.
© 2014, John Trapani, CPA,
All rights to reproduce or quote
any part of the chapter in any other publication are reserved by the author.
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JOHN TRAPANI
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Certified Public Accountant
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2975 E. Hillcrest Drive, #403
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Thousand Oaks, CA 91362
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(805)
497-4411 E-mail John@TrapaniCPA.com
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Website:
www.TrapaniCPA.com
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Blog:
www.AccountantForDisasteRrecovery.com
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It All Adds Up For You
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Tax
Advice Disclaimer
Any
implication of accounting, business or tax advice contained in this material is
not intended as a thorough, in-depth analysis related to your specific issues.
It is not a substitute for a formal opinion including a discussion or your
specific situation. It is not sufficient to avoid tax-related penalties. If
desired, John Trapani, CPA would be pleased to perform the requisite research,
specific to your facts and circumstances and provide you with a detailed
written analysis. Such an engagement may be the subject of a separate
engagement letter that would define the scope and limits of the desired consultation services.
This material was
completed on the date of the posting
Below is the FEMA Disaster Declaration:
President Declares Disaster for California
Release date: September
11, 2014
Release Number: HQ-14-075
WASHINGTON,
D.C. – The U.S. Department of Homeland Security's Federal Emergency
Management Agency announced that federal disaster aid has been made available
to the State of California to supplement state, tribal, and local recovery
efforts in the area affected by an earthquake during the period of August 24 to
September 7, 2014.
The President's
action makes federal funding available to state and eligible tribal and local
governments and certain private nonprofit organizations on a cost-sharing basis
for emergency work and the repair or replacement of facilities damaged by the
earthquake in Napa and Solano counties.
Federal funding is
also available on a cost-sharing basis for hazard mitigation measures for all
counties and tribes within the state.
Stephen M. De Blasio
Sr. has been named as the Federal Coordinating Officer for federal recovery
operations in the affected area. De Blasio said additional designations may be
made at a later date if requested by the state and warranted by the results of
further damage assessments.
Follow FEMA online at
www.fema.gov/blog, www.twitter.com/fema,
www.facebook.com/fema,
and www.youtube.com/fema.
Also, follow Administrator Craig Fugate's activities at www.twitter.com/craigatfema.
The social media
links provided are for reference only. FEMA does not endorse any
non-government websites, companies or applications.
FEMA's mission is to
support our citizens and first responders to ensure that as a nation we work
together to build, sustain, and improve our capability to prepare for, protect
against, respond to, recover from, and mitigate all hazards.
Last Updated:
September 12, 2014 -
07:29
