Tax Provisions to Assist with Disaster Recovery [November 29, 2012]   [open pdf - 338KB]

"Relief after a natural or man-made disaster may come from what many might consider an unlikely source: the Internal Revenue Code (IRC). The IRC includes several tax relief provisions that apply to affected taxpayers. Some of these provisions are permanent. The following are among the permanent provisions discussed in this report: [1] casualty loss deductions, IRC Section 165; [2] exemption from taxation for disaster relief payments to individuals, IRC Section 139; [3] exemption from taxation for certain insurance payments, IRC Section 123; and [3] deferral of gain from the involuntary conversion of homes destroyed or damaged by a disaster, IRC Section 1033. In recent years, Congress has enacted tax legislation generally intended to assist victims of specific disasters; as a result, these laws were temporary in nature. […] This report provides a basic overview of existing, permanent provisions that benefit victims of disasters, as well as past, targeted legislative responses to particular disasters. The relief is discussed without examining either the qualifications for or the limitation on claiming the provisions' benefits. In light of Hurricane Sandy, this report is designed to help Congress identify previous legislative responses to recent disasters."

Report Number:
CRS Report for Congress, R42839
Public Domain
Retrieved From:
Via E-mail
Media Type:
Help with citations