The IRS today released advance versions of two revenue procedures—Rev. Proc. 2018-08 and Rev. Proc. 2018-09—providing safe harbor methods for individual taxpayers to use in determining the amount of casualty losses, and in particular losses incurred as a result of hurricanes in 2017.
Rev. Proc. 2018-08 [PDF 70 KB] provides safe harbor methods for individual taxpayers to use in determining the amount of their casualty and theft losses for their homes and personal belongings. As noted in an IRS transmittal message:
As noted in a related IRS release (IR-2017-202), one of the safe harbor methods allows a homeowner to determine the amount of loss, up to $20,000, by obtaining a contractor estimate of repair costs. Another safe harbor method allows a homeowner to determine the amount of loss resulting from a federally declared disaster using the repair costs on a signed contract prepared by a licensed contractor. The revenue procedure also provides a table for determining the value of personal belongings damaged, destroyed or stolen as a result of a federally declared disaster.
Rev. Proc. 2018-08 states that:
Rev. Proc. 2018-09 [PDF 105 KB] provides a safe harbor method under which individual taxpayers may use one or more cost indexes to determine the amount of loss to their homes as a result of specific hurricanes and tropical storms in 2017—Hurricane and Tropical Storm Harvey, Hurricane Irma, and Hurricane Maria.
The cost indexes provide tables with cost per square foot for Texas, Louisiana, Florida, Georgia, South Carolina, Puerto Rico, and the U.S. Virgin Islands.
Rev. Proc. 2018-09 states that:
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.