The IRS today released an advance version of Rev. Proc. 2018-14 that extends the time for individual taxpayers to pay to repair damage to their personal residences resulting from deteriorating concrete foundations caused by the presence of the mineral “pyrrhotite.”
Read Rev. Proc. 2018-14 [PDF 16 KB]
Rev. Proc. 2017-60 was released in November 2017, to provide a “safe harbor” for individual taxpayers to deduct amounts paid to repair damage to their personal residences caused by deteriorating concrete foundations containing pyrrhotite.
Under the safe harbor, certain damage resulting from deteriorating concrete foundations would be treated as a casualty loss, and would not be challenged by the IRS provided that the taxpayer followed the guidance in Rev. Proc. 2017-60. Read TaxNewsFlash-United States
Rev. Proc. 2018-14 modifies Rev. Proc. 2017-60 to extend the time for individuals to pay to repair damage to their personal residences because of deteriorating concrete foundations caused by pyrrhotite.
The IRS noted in today’s revenue procedure that it was aware of “unique hardships” caused by the repairs necessary to address the deteriorating concrete foundations and that it had received comments that taxpayers needed additional time to make the repairs. Accordingly, today’s revenue procedure provides an extension of time for individual taxpayers to pay to repair the damage to their personal residences under the safe harbor provided by the 2017 revenue procedure.
As summarized in an IRS transmittal message, for damage resulting before 2018, if a taxpayer pays to repair the damage prior to the last day for filing a timely Form 1040X for the 2017 tax year, the taxpayer may treat the amount paid as a casualty loss on a timely filed Form 1040X for the 2017 tax year.
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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.