[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.165-11]

[Page 905-906]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.165-11  Election in respect of losses attributable to a disaster.

    (a) In general. Section 165(h) provides that a taxpayer who has 
sustained a disaster loss which is allowable as a deduction under 
section 165(a) may, under certain circumstances, elect to deduct such 
loss for the taxable year immediately preceding the taxable year in 
which the disaster actually occurred.
    (b) Loss subject to election. The election provided by section 
165(h) and paragraph (a) of this section applies only to a loss:
    (1) Arising from a disaster resulting in a determination referred to 
in subparagraph (2) of this paragraph and occurring--
    (i) After December 31, 1971, or
    (ii) After December 31, 1961, and before January 1, 1972, and during 
the period following the close of a particular taxable year of the 
taxpayer and on or before the due date for filing the income tax return 
for that taxable year (determined without regard to any extension of 
time granted the taxpayer for filing such return);
    (2) Occurring in an area subsequently determined by the President of 
the United States to warrant assistance by the Federal Government under 
the Disaster Relief Act of 1974; and
    (3) Constituting a loss otherwise allowable as a deduction for the 
year in which the loss occurred under section 165(a) and the provisions 
of Sec. Sec. 1.165-1 through 1.165-10 which are applicable to such 
losses.
    (c) Amount of loss to which election applies. The amount of the loss 
to which section 165(h) and this section apply shall be the amount of 
the loss sustained during the period specified in paragraph (b)(1) of 
this section computed in accordance with the provisions of section 165 
and those provisions of Sec. Sec. 1.165-1 through 1.165-10 which are 
applicable to such losses. However, for purposes of making such 
computation, the period specified in paragraph (b)(1) of this section 
shall be deemed to be a taxable year.
    (d) Scope and effect of election. An election made pursuant to 
section 165(h) and this section in respect of a loss arising from a 
particular disaster shall apply to the entire loss sustained by the 
taxpayer from such disaster during the period specified in paragraph 
(b)(1) of this section in the area specified in paragraph (b)(2) of this 
section. If such an election is made, the disaster to which the election 
relates will be deemed to have occurred in the taxable year immediately 
preceding the taxable year in which the disaster actually occurred, and 
the loss to which the election applies will be deemed to have been 
sustained in such preceding taxable year.
    (e) Time and manner of making election. An election to claim a 
deduction with respect to a disaster loss described in paragraph (b) of 
this section for the taxable year immediately preceding the taxable year 
in which the disaster actually occurred must be made by filing a return, 
an amended return, or a claim for refund clearly showing that the 
election provided by section 165(h) has been made. In general, the 
return or claim should specify the date or dates of the disaster which 
gave rise to the loss, and the city, town, county, and State in which 
the property which was damaged or destroyed was located at the time of 
the disaster. An election in respect of a loss arising from a particular 
disaster occurring after December 31, 1971, must be made on or before 
the later of (1) the due date for filing the income tax return 
(determined without regard to any extension of time granted the taxpayer 
for filing such return) for the taxable year in which the disaster 
actually occurred, or (2) the due date of filing the income tax return 
(determined with regard to any extension of time granted the taxpayer 
for filing such return) for the taxable year immediately preceding the 
taxableyear in which the disaster actually occurred. Such election shall 
be irrevocable after the later of (1) 90 days after the date on which 
the election was made, or (2) March 6, 1973. No revocation of such 
election shall be effective unless the amount of any credit or refund 
which resulted from such election is paid to the Internal Revenue 
Service within the revocation period described in the preceding 
sentence. However, in the case of a revocation made before receipt by 
the taxpayer of a refund claimed pursuant to such election, the

[[Page 906]]

revocation shall be effective if the refund is repaid within 30 calendar 
days after such receipt. An election in respect of a loss arising from a 
particular disaster occurring after December 31, 1961, and before 
January 1, 1972, must be made on or before the later of (1) the 15th day 
of the third month following the month in which falls the date 
prescribed for the filing of the income tax return (determined without 
regard to any extension of time granted the taxpayer for filing such 
return) for the taxable year immediately preceding the taxable year in 
which the disaster actually occurred, or (2) the due date for filing the 
income tax return (determined with regard to any extension of time 
granted the taxpayer for filing such return) for the taxable year 
immediately preceding the taxable year in which the disaster actually 
occurred. Such election shall be irrevocable after the date by which it 
must be made.

[T.D. 6735, 29 FR 6493, May 19, 1964, as amended by T.D. 7224, 37 FR 
25928, Dec. 6, 1972; T.D. 7522, 42 FR 63411, Dec. 16, 1977]