The American Institute of CPAs has written to the leaders of Congress’s tax-writing committees asking them to expand the replacement period for property loss for taxpayers affected by Hurricane Sandy.
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In letters to Senate Finance Committee chairman Max Baucus, D-Mont., and ranking member Orrin Hatch, R-Utah, and House Ways and Means Committee chairman Dave Camp, R-Mich., and ranking member Sander Levin, D-Mich., AICPA Tax Executive Committee chair Jeffrey A. Porter encouraged lawmakers to provide additional relief to Sandy victims.
“The members of the American Institute of Certified Public Accountants (AICPA) are all too familiar with natural disasters such as Hurricane Sandy, and the AICPA is therefore uniquely sensitive to the need for legislative and administrative relief to aid affected taxpayers who are recovering from the storm’s devastating impact,” he wrote last Thursday.
“The AICPA truly appreciates the prompt action taken by the Internal Revenue Service (IRS) to provide additional time to taxpayers and preparers affected by Hurricane Sandy in which to file returns and make payments. Hurricane Sandy certainly was an extraordinary and devastating event, and the IRS’s immediate response was welcomed by all stakeholders. More is needed, however.”
Porter acknowledged that in the 112th Congress, the Hurricane Sandy Tax Relief Act of 2012 provided such relief. However, based on the AICPA’s experience with hurricanes in the past, the Institute suggests adding another provision to any final Sandy-related legislation.
“Under present law, when a taxpayer has experienced a property loss, the period in which the taxpayer must replace the property is limited to two years under Internal Revenue Code section 1033,” he wrote. “We recommend expanding the replacement period to five years for property that is involuntarily converted due to a hurricane or similar event. Many of the communities impacted by Hurricane Sandy have historic buildings that will require an extensive permit application and approval process, as well as an extended rebuilding or renovation period. A five-year replacement period would allow for impacted taxpayers to rebuild their properties while claiming the benefits that the involuntary conversion provisions are intended to provide.”