Talking through the potential opportunity and uncertainty of business tax losses realized during the coronavirus disaster emergency.
President Trump declared a disaster emergency for the coronavirus on March 13, 2020 for the entire United States and territories. This declaration allows federal agencies to take actions to help U.S. based businesses and people who are facing difficult circumstances. The disaster declaration also triggers certain provisions in the tax code under Section 165 that permit taxpayers who experience a qualified disaster loss to choose to claim the loss in the current tax year (2020) or in the prior tax year (2019). Disaster losses are usually associated with natural disasters such as hurricanes, floods and tornadoes.
Will the same rules apply to a pandemic disaster?
Why is this choice of year to claim the loss important?
What business losses may qualify?
Sarah McGregor, Director of Tax Accounting Methods addresses these questions and more in the following brief video.
If you have questions regarding losses incurred as a result of the coronavirus pandemic please consult your Cherry Bekaert tax advisor.