Hurricane Wilma

[SAM]

Is there a relief of the $100 floor and 10% of agi for individuals with the effect of Wilma in Lee County, FL

I saw with Katrina there was such relief. If so with Wilma - can you guide me to the IRS reference.

thanks in advance

[Brad Imsdahl]

Gulf Opportunity Zone Act of 2005

The President just signed into law the Gulf Opportunity Zone Act of 2005 which extends some of the provisions from the Katrina law over to Hurricanes Rita and Wilma. We are currently working on something for our Updates page that will answer your question. If you sign up for our free email notification service, you will get an email once the update has been posted to our web site.

[Brad Imsdahl]

The Gulf Opportunity Zone Act of 2005

Our coverage of the new law is now posted to our updates page at:

http://www.thetaxbook.com/updates_view.asp?ID=34

Interesting side note that affects non-hurricane clients:

The new uniform definition of a qualifying child rules added something to the code allowing a noncustodial spouse to claim the dependency exemption if the divorce decree stated that he or she gets the dependency exemption. Prior to that, it was unclear whether that was enough or whether the custodial spouse had to release the exemption by signing Form 8332. The courts tended to side with the IRS on this issue saying Form 8332 was required, or a similar statement containing exactly the same information.

The new law makes it clear that the noncustodial spouse can only get the dependency exemption if the custodial spouse signs away the exemption on Form 8332. What the divorce decree says is now irrelevant.

[Richard]

GO Zone & Dependency

Brad, I tried to locate this provision (Form 8332 now required; divorce decree is now meaningless) in the GO Zone bill (at http://thomas.loc.gov/cgi-bin/query/z?c109:h4337:) but could not find it. I found nothing in that version of the bill that even speaks to this. (Best I can tell, that was the final version, but that could be wrong.) Can you point me a little better for my cross-reference / research work? Maybe you have a good location to access the final bill? I know that if this comes up I will want better references than just my pencil mark in the Tax Book.

Thanks,
Richard

[Brad Imsdahl]

H.R. 4440, Sec. 404

Your link was to H.R. 4337. The final bill that got signed into law was H.R. 4440.

Sec. 404 of that bill says:




SEC. 404. AMENDMENTS RELATED TO THE WORKING FAMILIES TAX RELIEF ACT OF 2004.

(a) Amendment Related to Section 201 of the Act- Subsection (e) of section 152 is amended to read as follows:

`(e) Special Rule for Divorced Parents, Etc-

`(1) IN GENERAL- Notwithstanding subsection (c)(1)(B), (c)(4), or (d)(1)(C), if--

`(A) a child receives over one-half of the child's support during the calendar year from the child's parents--

`(i) who are divorced or legally separated under a decree of divorce or separate maintenance,

`(ii) who are separated under a written separation agreement, or

`(iii) who live apart at all times during the last 6 months of the calendar year, and--

`(B) such child is in the custody of 1 or both of the child's parents for more than one-half of the calendar year, such child shall be treated as being the qualifying child or qualifying relative of the noncustodial parent for a calendar year if the requirements described in paragraph (2) or (3) are met.

`(2) EXCEPTION WHERE CUSTODIAL PARENT RELEASES CLAIM TO EXEMPTION FOR THE YEAR- For purposes of paragraph (1), the requirements described in this paragraph are met with respect to any calendar year if--

`(A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and

`(B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable year beginning during such calendar year.

`(3) EXCEPTION FOR CERTAIN PRE-1985 INSTRUMENTS-

`(A) IN GENERAL - For purposes of paragraph (1), the requirements described in this paragraph are met with respect to any calendar year if--

`(i) a qualified pre-1985 instrument between the parents applicable to the taxable year beginning in such calendar year provides that the noncustodial parent shall be entitled to any deduction allowable under section 151 for such child, and

`(ii) the noncustodial parent provides at least $600 for the support of such child during such calendar year.

For purposes of this subparagraph, amounts expended for the support of a child or children shall be treated as received from the noncustodial parent to the extent that such parent provided amounts for such support.

`(B) QUALIFIED PRE-1985 INSTRUMENT- For purposes of this paragraph, the term `qualified pre-1985 instrument' means any decree of divorce or separate maintenance or written agreement--

`(i) which is executed before January 1, 1985,

`(ii) which on such date contains the provision described in subparagraph (A)(i), and

`(iii) which is not modified on or after such date in a modification which expressly provides that this paragraph shall not apply to such decree or agreement.

`(4) CUSTODIAL PARENT AND NONCUSTODIAL PARENT- For purposes of this subsection--

`(A) CUSTODIAL PARENT- The term `custodial parent' means the parent having custody for the greater portion of the calendar year.

`(B) NONCUSTODIAL PARENT- The term `noncustodial parent' means the parent who is not the custodial parent.

`(5) EXCEPTION FOR MULTIPLE-SUPPORT AGREEMENT- This subsection shall not apply in any case where over one-half of the support of the child is treated as having been received from a taxpayer under the provision of subsection (d)(3).

`(6) SPECIAL RULE FOR SUPPORT RECEIVED FROM NEW SPOUSE OF PARENT- For purposes of this subsection, in the case of the remarriage of a parent, support of a child received from the parent's spouse shall be treated as received from the parent.'.

(b) Amendment Related to Section 203 of the Act- Subparagraph (B) of section 21(b)(1) is amended by inserting `(as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B))' after `dependent of the taxpayer'.

(c) Amendment Related to Section 207 of the Act- Subparagraph (A) of section 223(d)(2) is amended by inserting `, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof' after `section 152'.

(d) Effective Date- The amendments made by this section shall take effect as if included in the provisions of the Working Families Tax Relief Act of 2004 to which they relate.

[Sam]

Brad thank you and that is why I went with The Tax Book

Brad

Thank you for the quick response. This is why I stay with the "original" authors. Just received the "Deluxe" Tax Book and it looks great with valuable information.

So the $100 and 10% of AGI is not applicable to FL hurricane Wilma victims if I read it right?

Sam

[Brad Imsdahl]

Brad


So the $100 and 10% of AGI is not applicable to FL hurricane Wilma victims if I read it right?

Sam

Yes, you are correct. Those limitations do not apply to victims of any of the hurricanes.

[Richard]

Thank You

Brad, thanks for the thorough and gracious response. I was suspicious of a bill change (HR4337 to 4440) but am still learning how to sort those things out.