RE: Income Tax Relief for Disaster Losses
In order to provide disaster assistance for those who have suffered losses or damage to property during the March 19, 1991, through March 23, 1991, disaster, Governor John Waihee has proclaimed the disaster area to have occured in the central, windward coast, southeast portion of Oahu and in other isolated areas of Oahu in the City and County of Honolulu.
For the purposes of the Hawaii Income Tax Law, you may claim all of the casualty loss deductions allowed by Section 165 of the Internal Revenue Code. Casualty losses on business property are deductible in full. A loss on nonbusiness property is deductible to the extent it exceeds $100.00 plus 10 percent of adjusted gross income. The following options are available after you have determined the amount of your losses:
1. You may elect to deduct the loss on your 1991 income tax return; or
2. You may elect to deduct the loss in five equal installments over
a period of five years, beginning with your income tax return for
3. You may have net operating loss carryback or carryover benefits which
may reduce your tax liabilities. You do not have to be a
business to claim this benefit; all taxpayers may claim this carryback or carryover loss benefit.
PLEASE NOTE: If you elect to deduct your losses on your 1991 return, you may carryback your losses to 1988 (3 year carryback) or carryover your losses to 2006 (15 year carryover). If you wish, you may elect to use only the carryover loss benefit.
PLEASE CONTACT THE OAHU DISTRICT OFFICE IF YOU HAVE ANY QUESTIONS OR
NEED FURTHER ASSISTANCE. THE DISASTER INFORMATION HOTLINE IS (808) 548-3938
OR YOU MAY CALL THE TAXPAYER SERVICES BRANCH INFORMATION LINE AT:
RICHARD F. KAHLE, JR.
Director of Taxation