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The IRS has determined that the Chilean earthquake, which occurred in February 2010, is an event of a catastrophic nature for federal tax purposes, and has consequently designated the earthquake as a qualified disaster under Code Sec. 139.

The designation under Code Sec. 139(c)(3) enables employer-sponsored private foundations to assist certain victims in areas affected by the Chilean earthquake and enables recipients to exclude qualified disaster relief payments from gross income. A qualified disaster relief payment includes any amount paid to, or for the benefit of, an individual to reimburse or pay reasonable and necessary personal, family, living or funeral expenses, and expenses incurred for the repair or rehabilitation of a personal residence or replacement of its contents to the extent that the need for such repair, rehabilitation or replacement is attributable to a qualified disaster. These payments are not included in the recipient's gross income provided that the payments are not otherwise compensated for by insurance or otherwise.

IR-2010-28,

2010FED ¶46,298

Notice 2010-26, 2010FED ¶46,299

Other References:

Code Sec. 139

CCH Reference - 2010FED ¶7648.10

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CCH Reference - TRC INDIV: 33,310.05