The IRS has postponed the deadline to make an election to deduct casualty losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia in the preceding taxable year until October 15, 2013.
Taxpayers can choose to deduct their casualty losses to reduce 2011 income, by filing an amended 2011 tax return or to reduce their 2012 income on their 2012 tax return.
As a result of this recent IRS Notice taxpayers can make the choice to take the write-off on their 2011 tax return no later than October 15, 2013.
Filing an amended 2011 tax return might benefit someone whose income dropped drastically in the last two months of 2012 because of the storm, and to whom the deduction is thus more valuable against 2011 income.
MayerMeinberg LLP 