from 4684 instructions
Generally, you can deduct the part of your
casualty or theft loss that isn't reimbursable in
the tax year the casualty occurred or the theft
was discovered. However, a disaster loss may be treated differently.
Disaster Losses
A disaster loss is a loss that occurred in an area
determined by the President of the United
States to warrant federal disaster assistance
and that is attributable to a federally declared
disaster. It includes a major disaster or
emergency declaration.
To determine the amount to deduct for a
disaster loss, you must take into account as
reimbursements any benefits you received or
which you have a reasonable possibility of
receiving from federal or state programs to
restore your property.
Disaster year. The disaster year is the tax
year in which you sustained the loss attributable
to a federally declared disaster. Generally, a
disaster loss is sustained in the year the
disaster occurred. However, a disaster loss
may also be sustained in a year after the
disaster occurred. For example, if a claim for
reimbursement exists for which there is a
reasonable prospect of recovery, no part of the
loss for which reimbursement may be received
is sustained until it can be ascertained with
reasonable certainty whether you will be
reimbursed. Since reimbursed in 2022 that would be the year of deduction despite paying some bills in 2023. However, see the following for deducting the loss in 2021.
Election to deduct loss in the preceding
year. 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 elect to deduct the loss in the
tax year immediately before the disaster year. A
list of areas warranting public or individual
assistance (or both) is available at the FEMA
website at FEMA.gov/Disasters.
To make this election for a loss in disaster
year 2022, complete Part I of Section D on your
2021 Form 4684 and attach it to your 2021
original or amended return that claims the
disaster loss. See Section D—Election To
Deduct Federally Declared Disaster Loss in
Preceding Tax Year, later.
You must make an election to deduct a 2022
disaster loss on your 2021 return on or before
the date that is 6 months after the regular due
date for filing your original return (without
extensions) for the disaster year. For calendar
year individual taxpayers, the deadline for
electing to take a 2022 disaster loss on your
2021 tax return is October 16, 2023.
Revoking a prior election to deduct loss
in the preceding year. Complete Part II of
Section D if you want to revoke a 2021 disaster
year election to deduct a federally declared
disaster loss in the preceding tax year. Attach
the completed Section D to an amended return
the loss is reported on form 4684 part B
