federally declared disaster
(13) Special rules for residences destroyed in federally declared disasters (A) Principal residence destroyed At the election of the taxpayer, if the principal residence (within the meaning of section 121) of such taxpayer is— (i) rendered unsafe for use as a residence by reason of a federally declared disaster occurring before January 1, 2010 , or (ii) demolished or relocated by reason of an order of the government of a State or political subdivision thereof on account of a federally declared disaster occurring before such date, then, for the 2-year period beginning on the date of the disaster declaration, subsection (d)(1) shall not apply with respect to such taxpayer and subsection (e) shall be applied by substituting “110” for “90” in paragraph (1) thereof. (B) Principal residence damaged (i) In general At the election of the taxpayer, if the principal residence (within the meaning of section 121) of such taxpayer was damaged as the result of a federally declared disaster occurring before January 1, 2010 , any owner-financing provided in connection with the repair or reconstruction of such residence shall be treated as a qualified rehabilitation loan. (ii) Limitation The aggregate owner-financing to which clause (i) applies shall not exceed the lesser of— (I) the cost of such repair or reconstruction, or (II) $150,000. (C) Federally declared disaster For purposes of this paragraph, the term “federally declared disaster” has the meaning given such term by section 165(h)(3)(C)(i). (D) Election; denial of double benefit (i) Election An election under this paragraph may not be revoked except with the consent of the Secretary. (ii) Denial of double benefit If a taxpayer elects the application of this paragraph, paragraph (11) shall not apply with respect to the purchase or financing of any residence by such taxpayer.