UNDATED (AP) - The Internal Revenue Service is giving owners of homes that were destroyed by Hurricane Katrina an extra year to sell their empty lot in a tax-friendly manner.
Federal tax laws give owners of homes destroyed in disasters two years to sell the remaining vacant lot and still qualify for the tax advantages they would enjoy when selling their primary residence.
But after two years, according to current federal law, the sale of these properties is classified as a sale of vacant land, a transaction that is usually subject to greater tax implications.
Tuesday, the IRS extended that deadline to three years for victims of the 2005 hurricane.
The extension also covers property owners impacted by two other 2005 hurricanes: Rita and Wilma.
(Copyright 2007 by The Associated Press. All Rights Reserved.)