Disaster Victims Can Amend Return to Deduct Losses
If you’re the victim of a hurricane, wildfire or other natural disaster, you might be able to file an amended return to claim a casualty loss deduction for the tax year before the disaster. Alternatively, you can claim the loss in the year of the disaster: Pick whichever year is more favorable to you.
However, the loss must be attributable to a federally declared disaster that occurred in an area warranting public and/or individual assistance. Otherwise, this special rule doesn’t apply.
If you decide to claim the loss for the year before the disaster, you must file your amended return no later than six months after the due date for filing your original return (without extensions) for the year in which the loss took place. So, for example, if the disaster occurred in 2019 and you want to claim your loss on your 2018 return, you must file an amended 2018 return by October 15, 2020.
Also note that a casualty loss deduction is generally subject to a $100-per-casualty limit. It also can’t exceed 10% of your adjusted gross income, and you have to itemize to claim it.
