Section 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.

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.

Note

For taxable years prior to 1987, the Wisconsin corporation tax law was contained in ch. 71 , Stats., and was not referenced to the federal law in regard to disaster losses. Therefore, the election provisions in the Internal Revenue Code were not available to corporations for Wisconsin franchise and income tax purposes for those years. The amendment allowing disaster losses for corporations was enacted by 1987 Wis. Act 27 . Microsoft Windows NT 6.1.7601 Service Pack 1 The treatment described in this section became effective with 1986 individual income tax returns filed in taxable year 1987. Section 71.02 (2) (me), 1985 Stats., was again renumbered, s. 71.01 (16), Stats., by 1987 Wis. Act 312 . For 1985 and prior year income tax returns filed in 1986 and prior taxable years, disaster area losses from damage to property used for personal purposes were also allowed, as an itemized deduction. Microsoft Windows NT 6.1.7601 Service Pack 1 As an example of Note 2) on March 23, 1976, the president of the United States declared that 22 Wisconsin counties warranted assistance by the federal government under the Disaster Relief Act of 1974. This resulted from the damage during the severe rain and ice storm which occurred March 1 through 12, 1976 in the following 22 counties: - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 An individual who sustained a casualty loss from this disaster in any of these 22 counties, regardless of where that individual resided, could have elected to deduct the loss on the individual's 1975 Wisconsin income tax return. The election had to have been made on or before April 15, 1977 for calendar year taxpayers, assuming the due date for filing the 1975 Wisconsin return was not extended beyond April 15, 1977. If the election was not made, the loss was deductible on the taxpayer's 1976 return. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 Section Tax 2.98 interprets ss. 71.01 (6) , 71.22 (4) , and 71.255 (7) (b) Stats. Microsoft Windows NT 6.1.7601 Service Pack 1