SECTION 1. PURPOSE

.01 This revenue procedure provides the Cost Indexes Safe Harbor Method that individual taxpayers may use in determining the amount of their casualty losses pursuant to § 165 of the Internal Revenue Code for their personal-use residential real property (as defined in section 3.02 of this revenue procedure) damaged or destroyed as a result of Hurricane and Tropical Storm Harvey, Hurricane Irma, and Hurricane Maria (the “2017 Hurricanes”). Specifically, this revenue procedure provides a safe harbor method that individuals may use to determine the decrease in fair market value of their personal-use residential real property on their U.S. income tax returns filed with the Internal Revenue Service (IRS).

.02 The IRS will not challenge an individual’s determination of the decrease in fair market value of personal-use residential real property attributable to one of the 2017 Hurricanes if the individual qualifies for and uses the safe harbor method described in section 4 of this revenue procedure.

.03 If an individual uses the safe harbor method described in section 4 of this revenue procedure, the individual also must take into account the value of any no-cost repairs as described in section 6 of this revenue procedure.

.04 Use of the safe harbor method described in this revenue procedure is not mandatory. An individual may, instead, use a safe harbor method described in Rev. Proc. 2018–08, 2018–02 I.R.B.

286, or the actual reduction in the fair market value of the personal-use residential real property, pursuant to § 1.165– 7(a)(2) of the Income Tax Regulations, if the individual has proper substantiation.

.05 The safe harbor method provided in this revenue procedure applies only to the circumstances within the scope of this revenue procedure and may not be used in any other circumstances.