The IRS is providing a special extension of time to victims of flooding in twenty counties in Colorado. Eligible taxpayers now have until October 15, 2014, to decide whether to claim their disaster-related losses on their 2012 or 2013 tax returns. Taxpayers can choose the deduct the losses on whichever year's tax return results in the greatest tax savings.


Map from FEMA.gov

This provision is available to individuals and businesses located in Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Crowley, Denver, El Paso, Fremont, Gilpin, Jefferson, Lake, Larimer, Lincoln, Logan, Morgan, Pueblo, Sedgwick, Washington and Weld counties of Colorado.

To be eligible, the person or business must have "suffered uninsured or unreimbursed losses resulting from severe storms, flooding, landslides and mudslides," the IRS notes, in any of the twenty counties mentioned above.

Disaster-related losses can be deductible as part of the casualty and theft loss deduction. Both individuals and businesses calculate their loss deduction using Form 4684.

As a procedural matter, the IRS instructs,

"Affected taxpayers claiming the disaster loss on last year's return should put the Disaster Designation 'Colorado/Severe Storms, Flooding, Landslides, and Mudslides' at the top of the form so that the IRS can expedite the processing of the refund."

Additional Resources:

• Disaster Assistance and Emergency Relief for Individuals and Businesses
• Casualties, Disasters, and Thefts (Publication 547)
• Disaster Resource Guide (Publication 2194, pdf)
• Casualty, Disaster, and Theft Losses (Including Federally Declared Disaster Areas) (Tax Topic 515)
• Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property, Publication 584, pdf)

• Business Casualty, Disaster, and Theft Loss Workbook (Publication 584-B, pdf)
• Form 4684, Casualties and Thefts (pdf)
• IRS Gives Colorado Flood Victims More Time To Decide When To Claim Losses (IR-2014-35)
• Tax Relief for Victims of Severe Storms in Colorado (Den-2013-28)
• Colorado Severe Storms, Flooding, Landslides, and Mudslides (DR-4145, FEMA.gov)