IRS recently released Revenue Procedure 2014-49 to make revisions to Revenue Procedure 2007-54 which established temporary relief from certain requirements of Section 42 of the Internal Revenue Code for owners and agencies located in areas affected by major disasters.
The key modifications to Revenue Procedure 2007-54 include:
- Changing the reasonable restoration period for recapture relief and the tolling period for severely damaged, destroyed, or uninhabitable buildings in the first year of the credit period;
- Using the building’s qualified basis at the end of the taxable year immediately preceding the first day of the incident period rather than at the end of the taxable year preceding the major disaster declaration in determining qualified basis;
- Incorporating a temporary suspension of certain income limitations for displaced Individuals;
- Eliminating the need for self-certification of income eligibility;
- Permitting an agency to allow an owner within its jurisdiction to provide emergency housing relief to displaced Individuals from other jurisdictions;
- Describing the consequences of providing emergency housing relief in the first year of the credit period and after the first year of the credit period; and
- Modifying the safe harbor relating to the amount of credit allowable to a restored building to provide relief in circumstances where the restoration cost is less than the eligible basis cost.
Click here to read Revenue Procedure 2014-49
