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Casualty losses must generally be deducted in the tax year in which the loss event occurred. However, if you suffered a loss in a federally declared disaster area, you may deduct your loss in the preceding year.
To do this, you must file an amended tax return for the preceding year, and figure the loss and the change in taxes exactly as if the loss actually occurred in that preceding year. If you did not itemize your deductions in that preceding year, you can go back and add any other itemized deductions (such as mortgage interest, taxes, charitable contributions, etc.) that you would have been able to deduct in that year You generally must make this choice by the due date (not including extensions) for the tax return of the year that the loss actually occurred.