Snag and Others about Disaster Losses

[dmj4]

Federally Declared Disaster Area

We are amending 2009 to show flood losses for Federally Declared Disaster Area for the 2010 flooding in TN. Client owed and still owes taxes from 2008 and 2009. This loss will pay those back taxes, so I want everything to be in order. I know it has to be mailed before April 18.

Is attaching a statement to both years electing to claim on the 2009 return enough, or do I need to scratch something red across the top of the 1040X for 2009.

I have searched for exact wording and have not found one. I am planning to attach a statement saying TP elects to claim flood losses on property located at xxxx in 2009, instead of 2010. This area was declared a federal disaster area on May 4, 2010.

Thanks!

[Snaggletooth]

Appreciate your confidence

...but don't know about refiling 2009 for a disaster that happened in 2010. If this can be done, you know more about this than I do.

One thing is for shore -- there was a LOT of disaster area declared in Tennessee from last May 2-3. Unforgettable.

[dmj4]

When to deduct the loss. You generally must
deduct a casualty loss in the year it occurred.
However, if you have a casualty loss from a
federally declared disaster that occurred in an
area warranting public or individual assistance
(or both), you can choose to deduct that loss on
your return or amended return for the tax year
immediately preceding the tax year in which the
disaster happened. If you make this choice, the
loss is treated as having occurred in the preced-
ing year. See the Form 4684 instructions if you
are deducting a loss of personal use property
from a disaster declared a federal disaster in tax
years beginning after 2007 that occurred before
2010.

How to deduct your loss in the preceding
year. If you choose to deduct your loss on your
return or amended return for the tax year imme-
diately preceding the tax year in which the disas-
ter happened, include a statement saying that
you are making that choice. The statement can
be made on the return or can be filed with the
return. The statement should specify the date or
dates of the disaster and the city, town, county,
and state where the damaged or destroyed
property was located at the time of the disaster.
Time limit for making choice. You must
make this choice to take your casualty loss for
the disaster in the preceding year by the later of
the following dates.
• The due date (without extensions) for filing
your income tax return for the tax year in
which the disaster actually occurred.
• The due date (with extensions) for filing
the return for the preceding tax year.
Example. If you are a calendar year tax-
payer, you ordinarily have until April 18, 2011, to
amend your 2009 tax return to claim a casualty
loss that occurred during 2010.