SECTION 2. BACKGROUND

.01 Revenue Procedure 2017–60 provides a safe harbor method that allows a taxpayer who pays to repair damage to that taxpayer’s personal residence resulting from a deteriorating concrete foundation that contains the mineral pyrrhotite to

treat the amount paid as a casualty loss in the year of payment.

.02 The safe harbor is available to a taxpayer who has obtained a written evaluation from a licensed engineer indicating that the foundation was made with defective concrete, and has requested and received a reassessment report that shows the reduced reassessed value of the residential property based on the written evaluation from the engineer and an inspection pursuant to Connecticut Public Act No. 16–45. The safe harbor also is available to a taxpayer whose personal residence is either in Connecticut or outside of Connecticut, provided the taxpayer has obtained a written evaluation from a licensed engineer indicating that the foundation was made with defective concrete containing the mineral pyrrhotite.

3. To claim a casualty loss under the safe harbor in Rev. Proc. 2017–60, a taxpayer generally must have paid to repair damage caused by a deteriorating concrete foundation before January 1, 2018.

4. In view of the unique hardships caused by the extensive repairs necessary to remedy the deteriorating concrete foundations and the comments received expressing concern that taxpayers need additional time to make the repairs, the Department of the Treasury and the Internal Revenue Service have determined that it is appropriate to modify the safe harbor in Rev. Proc. 2017–60 to extend the time for individual taxpayers to pay to repair the damage to their personal residences.