Taxpayers Affected by Hurricane Sandy Could Be Penalized Under the “Repair Regulations”

[Elrod]

(JDSupra) - Taxpayers who claim a casualty loss due to Hurricane Sandy (or other casualty event) could suffer a harsh penalty under the so-called casualty loss rule in Temporary Treasury Regulation § 1.263(a)-3T(i)(1)(iii). That provision provides that a taxpayer must capitalize amounts paid to restore property, including amounts paid “for the repair of damage to a unit of property for which the taxpayer has properly taken a basis adjustment as a result of a casualty loss under section 165...

http://www.jdsupra.c...sandy-co-25511/