Section 42 properties affected by the recent hurricanes
Due to the Territory’s designation as a Presidentially Declared Disaster Area there is potential relief from loss of credits and recapture. We urge all owners to review Section 42, along with IRS Rev. Proc. 2014-49, and to have discussions with their tax counsel as soon as possible.
To qualify for relief the owners must at a minimum follow certain steps, as outlined below.
1. Owner must submit a Casualty Loss Form prior to 2/15/2018*.
2. Owner must submit a timely and accurate Annual Owner’s Report that references the casualty loss.
3. Owner must complete the restoration prior to 10/31/2019.
4. Owner must submit a Property Restoration form prior to 10/31/2019.
5. Any BINs not completely restored by 10/31/2019 will be subject to recapture and reduction in eligible basis.
The VIHFA is required to submit an 8823 to the IRS reporting the loss but will explain special circumstances surrounding the loss in the 8823 notes.
Please contact VIHFA or Spectrum Enterprises, Inc. if you have any questions.
*Please note that the Annual Reporting Deadline for U.S. Virgin Islands is also 2/15/2018. All End of Year materials are due on this date.
- VIRGIN ISLANDS HOUSING FINANCE AGENCY CASUALTY LOSS FORM (WORD) (PDF)
- Property Restoration Form (WORD) (PDF)
All Forms should be submitted to Daryl Griffiths and Janine Hector at VIHFA. Please CC Wil Whalen at Spectrum as well.
