Bill Summary
This legislation, known as the "Casualty Loss Deduction Restoration Act," aims to repeal a temporary limitation on personal casualty losses in the US Internal Revenue Code of 1986. This limitation was put in place for taxable years 2018 through 2025 and restricted the amount of personal casualty losses an individual could claim to $50,000 per year. However, the bill allows for an exception to this limitation for any losses caused by a federally declared disaster. Additionally, the period of limitation for filing a claim for credit or refund related to a loss described in the bill's amendment is extended for one year after the enactment of the Act. This legislation is effective for losses incurred in taxable years beginning after December 31, 2017, and the Secretary of the Treasury is instructed to issue any necessary regulations or guidance to implement the amendment.
Possible Impacts
1. The repeal of the temporary limitation on personal casualty losses could potentially benefit individuals who have experienced a personal casualty loss, such as damage to their home or property, by allowing them to claim a larger deduction on their taxes. This could provide financial relief for those who have suffered from a disaster or accident.
2. The temporary dollar limitation on personal casualty losses may restrict the amount of money an individual can claim as a deduction on their taxes. This could affect people who have experienced multiple personal casualty losses in a single year, as they may not be able to claim the full amount of their losses.
3. The extension of the period of limitation for filing a claim for credit or refund could benefit individuals who may have missed the original deadline for filing due to extenuating circumstances. This could potentially allow them to receive a refund or credit for a loss that occurred in a previous tax year.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2236 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2236
To amend the Internal Revenue Code of 1986 to repeal the temporary
limitation on personal casualty losses.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 11, 2023
Mr. Blumenthal (for himself, Mr. Cassidy, Ms. Warren, Mr. Markey, and
Mr. Murphy) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to repeal the temporary
limitation on personal casualty losses.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Casualty Loss Deduction Restoration
Act''.
SEC. 2. REPEAL OF TEMPORARY LIMITATION ON PERSONAL CASUALTY LOSSES;
TEMPORARY DOLLAR LIMITATION ADDED.
(a) In General.--Section 165(h) of the Internal Revenue Code of
1986 is amended by striking paragraph (5) and inserting the following
new paragraph:
``(5) Limitation for taxable years 2018 through 2025.--
``(A) In general.--In the case of an individual,
the aggregate amount of any personal casualty losses
allowed under subsection (a) with respect to a taxable
year beginning after December 31, 2017, and before
January 1, 2026, shall not exceed $50,000 for each such
taxable year.
``(B) Exception.--Subparagraph (A) shall not apply
to any personal casualty loss attributable to a
Federally declared disaster (as defined in subsection
(i)(5)) allowed under subsection (a).''.
(b) Extension of Period of Limitation.--
(1) In general.--In the case of a claim for credit or
refund which is properly allocable to a loss which is described
in paragraph (2)--
(A) the period of limitation prescribed in section
6511(a) of the Internal Revenue Code of 1986 for the
filing of such claim shall be treated as not expiring
earlier than the date that is 1 year after the date of
the enactment of this Act, and
(B) any limitation described in section 6511(b)(2)
shall not apply.
(2) Loss described.--A loss is described in this paragraph
if such loss is--
(A) described in section 165(c)(3) of the Internal
Revenue Code of 1986, and
(B) deductible under section 165(a) for a taxable
year beginning after December 31, 2017.
(c) Effective Date.--The amendment made by subsection (a) shall
apply to losses incurred in taxable years beginning after December 31,
2017.
(d) Regulations.--The Secretary of the Treasury (or the Secretary's
delegate) shall issue such regulations or other guidance as are
necessary to implement the amendment made by this section, including
regulations or guidance consistent with Revenue Procedure 2017-60.
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