WTC Records Folder 0140 label, 2001

NYC 9/11 Public Portal Document

Reasons for Change: This proposal would give taxpayers the option of considering insurance proceeds as an uncompensated loss. It would provide taxpayers with more flexibility in the treatment of these proceeds under the tax law.

> Demolition Costs

Proposal: The current treatment of demolition costs would be changed so that the costs can be deducted or amortized over a short period of, for example, five years for Federal tax purposes. Currently, these costs are added to the basis of the land and are recovered for tax purposes only when the land is sold.

Reasons for Change: While a considerable amount of emergency funding has been provided for demolition and cleanup, it will, most likely, not cover all replacement and upgrade costs for buildings in the area. Allowing taxpayers to deduct these costs, rather than having to wait until the property is sold, would make it less difficult for these taxpayers to continue their business within the State. There is a strong desire to rebuild and repair in a compressed timeframe. This proposal would make it more economically advantageous for property owners, who must demolish the remains of structures currently on their property, to rebuild within Manhattan.

➢ Deductibility of State and Local Sales Taxes

Proposal: This would allow State and local sales taxes to be deducted from Federal income and corporate taxes when incurred in the acquisition of property used in a trade or business. These taxes are currently capitalized into the basis of the acquired property.

Reasons for Change: This proposal would lower the effective cost of construction for affected businesses. In doing so it would make the rehabilitation of the recovery zone more attractive and stimulate investment in buildings throughout New York City.

➢ Deduction of Certain Expenses and Amortization

Proposal: Certain expenses, such as planning costs, land use approval costs, design and architectural fees, local fees charged to building owners (utility hookups, roads and sewers) and other pre-construction costs would be amortized over a short period of, for example, five years for Federal tax purposes.

Proposal: Taxpayers would be entitled to deduct as a business expense, costs related to new buildings or other property in New York City. Also allowed would be costs to repair, remove, replace or improve, property at

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