Notice 2013-21 - Taxpayers affected by Hurricane Sandy may postpone section 165(i) loss election until October 15 

February 28:   The IRS today released an advance copy of Notice 2013-21, which allows taxpayers in certain locations affected by Hurricane Sandy to postpone the time for making an election to deduct losses in the preceding tax year until October 15, 2013.

Notice 2013-21 [PDF 14 KB] postpones the deadline for “affected taxpayers” to make an election under section 165(i) to deduct in the preceding tax year losses attributable to Hurricane Sandy sustained in a “federally declared disaster area” in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, or West Virginia resulting from Hurricane Sandy.

Definitions

As explained in today’s notice, the IRS determined that the areas that FEMA has determined to be eligible for public assistance (or public assistance and individual assistance) pursuant to the major disaster and emergency declarations issued in response to Hurricane Sandy are “covered disaster areas.”


A taxpayer is an “affected taxpayer” who can postpone the deadline for making the section 165(i) election if:


  • The taxpayer sustained a loss attributable to Hurricane Sandy;
  • The loss occurred in a covered disaster area for Hurricane Sandy (regardless of whether the taxpayer’s principal residence or principal place of business is in one of the covered disaster areas); and
  • The deadline for the taxpayer to make a section 165(i) election for that loss would have been before October 15, 2013.

Notice 2013-21 clarifies that affected taxpayers for purposes of today’s notice are not affected taxpayers for purposes of other relief provided by the IRS unless the taxpayer separately qualifies as an affected taxpayer under other guidance issued by the IRS.


Notice 2013 directs affected taxpayers to include a reference to “Notice 2013-21” with their return, amended return, or refund claim on which they are making a postponed section 165(i) election.



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