By Frank Byrt
The American Institute of CPAs (AICPA) is asking Congress to amend its Hurricane Sandy tax relief legislation by extending the replacement period in which taxpayers can claim a property loss.
Hurricane Sandy slammed into the Northeast October 29, hitting New Jersey and New York particularly hard.
The House of Representatives approved H.R. 6683, Hurricane Sandy Tax Relief Act of 2012 January 15. It will provide about $50 billion of relief for the region pounded by the storm.
The Senate still must approve the legislation before President Obama can sign it into law.
In a January 17 letter to the House Committee on Ways and Means, the AICPA asked representatives to add another provision to the bill that would extend the period in which a taxpayer could claim a property loss to five years rather than two.
"Under present law, when a taxpayer has experienced a property loss, the period in which the taxpayer must replace the property is limited to two years under Internal Revenue Code section 1033", said the AICPA's letter. "We recommend expanding the replacement period to five years for property that is involuntarily converted due to a hurricane or similar event."
That's because many of the communities impacted by Hurricane Sandy have historic buildings that will require an extensive permit application and approval process as well as an extended rebuilding or renovation period. A five-year replacement period would allow for impacted taxpayers to rebuild their properties while claiming the benefits the involuntary conversion provisions are intended to provide, the AICPA said.
The AICPA also sent a letter to the Senate on January 17, specifically to the Senate Committee on Finance, and asked it to expedite approval of the bill.
The Hurricane Sandy Tax Relief Act includes $17 billion for immediate assistance, including housing and medical assistance, loans for small businesses, and more, while a second part of the bill would provide $33 billion for long-term recovery efforts, including infrastructure improvements.
The AICPA has a webpage that outlines resources available to those impacted by Hurricane Sandy, with information about such issues as tax extension relief; its AICPA Benevolent Fund, which was established for the purpose of assisting AICPA members through temporary periods of financial difficulty; and disaster planning and relief.
Separately, the IRS has previously agreed to provide additional time to taxpayers and preparers affected by Hurricane Sandy in which to file returns and make payments.