Wis. Admin. Code Department of Revenue Tax 2.98

Current through September 30, 2024

Section Tax 2.98 - Disaster area losses

(1)

(a) Hurricanes, fires, storms, floods, and other similar casualties may cause persons to suffer losses from damage to property used in a trade or business or for income-producing purposes for which insurance coverage is nominal or nonexistent. Losses sustained from casualties of this kind may be deductible on a federal and a Wisconsin income tax return.

(b) If a taxpayer sustains a casualty loss from a disaster in an area subsequently determined by the president of the United States to warrant federal assistance, section 165 (i) of the Internal Revenue Code gives taxpayers the election to deduct the loss on the return for the current tax year or on the return for the immediately preceding tax year.

(2)

(a) The Wisconsin income tax treatment is determined under the federal Internal Revenue Code in effect under s. 71.22(4), Stats., for corporations and s. 71.01(6), Stats., for individuals.

(b) If a corporation, designated agent of a combined group, or an individual desires to make the election after having filed a Wisconsin income tax return for the preceding taxable year, the casualty loss may be claimed by filing an amended Wisconsin return for that year.

Wis. Admin. Code Department of Revenue Tax 2.98

Cr. Register, April, 1978, No. 268, eff. 5-1-78; r. (2), renum. (3) to be (2) and am. (2) (a) 1. and (b), Register, September, 1983, No. 333, eff. 10-1-83; am. (1) (a), r. (2) (b), renum. (2) (a) 1. and 2. to be (2) (a) and (b) and am., Register, February, 1990, No. 410, eff. 3-1-90; CR 10-095: am. (2) (b) Register November 2010 No. 659, eff. 12-1-10; CR 13-012: am. (1) (b) Register August 2013 No. 692, eff. 9-1-13.

Amended by, correction made (2) (b) (Note [1]), (Note [2]), (Note [3]) under s. 13.92(4) (b), Stats., Register September 2020 No. 777, eff. 10/1/2020

Amended by, correction in (2) (b) (Notes) made under s. 35.17, Stats., Register August 2022 No. 800, eff. 9/1/2022

Tax 2.98 explains some federal provisions relating to disaster area losses and how the Wisconsin law for individuals conforms to the federal law, however, it does not explain all the details regarding casualty losses. Internal Revenue Service Publication 547, entitled Casualties, Disasters, and Thefts may be helpful in understanding such details as how to deduct a casualty loss, what to do if the loss exceeds income, how to adjust the basis of property damaged or replaced, how to report the amount received from insurance or other sources, and related casualty loss problems.

Note: Section Tax 2.98 interprets ss. 71.01(6), 71.22(4), and 71.255(7) (b) Stats.