RE:  Income Tax Relief for Disaster Losses - Kauai County

In order to provide disaster assistance for those who have suffered losses or damage to property during the December 13, 1991, through December 14, 1991, disaster, Governor John Waihee has proclaimed the disaster area to have occurred in the County of Kauai.

For the purposes of the Hawaii Income Tax Law, you may claim all of the casualty loss deductions allowed by Section 165 of the Internal Revenue Code. Casualty losses on business property are deductible in full. A loss on nonbusiness property is deductible to the extent it exceeds $100.00 plus 10 percent of adjusted gross income. The following options are available after you have determined the amount of your losses:

1. You may elect to deduct the loss on your 1991 income tax return; or

2. You may elect to deduct the loss in 5 equal installments over a period of 4 years, beginning with your income tax return for 1991; or

3. You may have net operating loss carryback or carryover benefits which may reduce your tax liabilities. You do not have to be a business to claim this benefit; all taxpayers may claim this carryback or carryover loss benefit.

PLEASE NOTE: If you elect to deduct your losses on your 1991 return, you may carryback your losses to 1988 (3 year carryback) or carryover your losses to 2006 (15 year carryover). If you wish, you may elect to use only the carryover loss benefit.