In 2014,the U.S.President declared a federal disaster due to the flooding in North Carolina.Dan lives in that area and lost his home in the flood.What choice does he have regarding when he can claim the loss on his tax return?
A)It must be claimed in 2013 if the return has not been filed by the date of the loss.
B)It must be claimed in 2014 if the loss is greater than the modified adjusted gross income.
C)It may be claimed in 2015 if an election is filed with the 2014 return.
D)It may be claimed in 2013 or 2014.

Question

Quizplus · Accepted Answer

According to IRS rules, a taxpayer can choose to claim a disaster loss on the tax return for the year the loss occurred or the tax return for the prior year. Therefore, Dan can choose to claim the loss on his 2013 or 2014 tax return. However, he should carefully consider the tax implications and consult a tax professional before making a decision.