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:
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