The result is your loss from the casualty. Up to this point, figuring the deductible loss is the same for both business and nonbusiness property losses. In figuring your loss, the loss of future profits is not considered. The loss of income you will not realize because of the casualty is also not considered. For information regarding nonbusiness casualty losses and how to deduct them see Topic 507 .
Casualty losses are generally deductible only in the year the casualty occurred.
However, if you have a deductible loss from a disaster in an area that is officially designated by the President of the United States as eligible for federal disaster assistance, you can choose to deduct that loss on your tax return for the year immediately preceding the loss year. In other words, you may treat the loss as having occurred in either the current year or the previous year, whichever provides the best tax results for you. Generally, you must make the choice to use the preceding year by the due date of the current year's return, without extensions. For example, the election to deduct a 2000 disaster loss on your 1999 return must be made on or before the due date of the 2000 return. You can revoke this choice within 90 days after making it by returning to the IRS any refund or credit you received from making the choice.