Disaster loss in 2021

Forum|Forum|4 years ago
April 18, 2022
1 reply
8 views

Client withdrew monies due to ice storm in Texas in 2021. Dist. Code on 1099-R was 1. she wants to spread reporting over 3 yrs. I can't find where this can be listed on 8915. Is there another form that I nd to use?

Lacerte Tax

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Best answer by qbteachmt

Bad news, from the Form 8915-F instructions:

"What Is a Qualified Disaster Distribution? <== QDD

For 2021, qualified disaster distributions are:

The qualified 2019 disaster distributions for the Puerto Rico Earthquakes (DR-4473-PR) reported on 2021 Form 8915-D, or
The qualified 2020 disaster distributions for qualified 2020 disasters reported on 2021 Form 8915-F (2020 disasters)."

I read various articles and I think this one is helpful: https://wilkecpa.com/qualified-disaster-related-distributions-from-retirement-plans/

"The qualifications to obtain a QDD are complicated. Before a QDD can be made, the following must occur:

A declaration by the President of a major disaster pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, during the period beginning on January 1, 2020, and ending on the date 60 days from the enactment of the act (i.e., February 25, 2021), if the “incident period” began on or after December 28, 2019, and on or before the date of the enactment of the Act (i.e., December 27, 2020).
The “incident period” is the period of the qualified disaster as specified by the Federal Emergency Management Agency (commonly known as FEMA). However, the disaster must have been declared between January 1, 2020, to February 25, 2021, AND the incident period must have begun on or after December 28, 2019, and on or before December 27, 2020."

The TX ice storm occurred in Feb. 11-21, 2021 (incident period) and was declared Feb 19, 2021.

qbteachmtAnswer

Level 15

Bad news, from the Form 8915-F instructions:

"What Is a Qualified Disaster Distribution? <== QDD

For 2021, qualified disaster distributions are:

The qualified 2019 disaster distributions for the Puerto Rico Earthquakes (DR-4473-PR) reported on 2021 Form 8915-D, or
The qualified 2020 disaster distributions for qualified 2020 disasters reported on 2021 Form 8915-F (2020 disasters)."

I read various articles and I think this one is helpful: https://wilkecpa.com/qualified-disaster-related-distributions-from-retirement-plans/

"The qualifications to obtain a QDD are complicated. Before a QDD can be made, the following must occur:

A declaration by the President of a major disaster pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, during the period beginning on January 1, 2020, and ending on the date 60 days from the enactment of the act (i.e., February 25, 2021), if the “incident period” began on or after December 28, 2019, and on or before the date of the enactment of the Act (i.e., December 27, 2020).
The “incident period” is the period of the qualified disaster as specified by the Federal Emergency Management Agency (commonly known as FEMA). However, the disaster must have been declared between January 1, 2020, to February 25, 2021, AND the incident period must have begun on or after December 28, 2019, and on or before December 27, 2020."

The TX ice storm occurred in Feb. 11-21, 2021 (incident period) and was declared Feb 19, 2021.

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C

Craw1Author

Level 3

What all this article is about is that the fact that the Governor in Texas declared a disaster for all counties in Texas did not matter since President did not declare this county in East Texas a disaster and any withdraws client makes is not deductible and is subject to 10% penalty for early withdraw of IRA monies!

qbteachmt

Level 15

"since President did not declare this county in East Texas a disaster"

They had quite a list, at first, then added more counties, later.

Which didn't matter, since it falls outside of the covered incident period for the Law that would give them the provisions they wanted to use. These are not always available; it's not a regular part of IRS code. They needed to be codified. You know of the CARES Act provision for "covid disaster."

This particular provision is in the CAA:

"The Consolidated Appropriation Act (CAA) defines qualified disasters as a major disaster that the President declares during the period beginning on January 1, 2020, and ending on February 25, 2021, but which must have occurred between December 28, 2019, and on or before December 27, 2020, and during the period specified by the Federal Emergency Management Agency (FEMA) as the period during which the disaster occurred (the “Incident Period”)."

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