Disaster Area Losses There are special rules that apply to Presidentially declareddisaster area losses. A Presidentially declared disaster isa disaster that occurred in an area declared by the President to beeligible for federal assistance under the Disaster Relief andEmergency Assistance Act. This part discusses the special rules for when to deduct a disasterarea loss and the abatement of interest on tax underpayments. Forother special rules, see Publication 547. When to deduct disaster area losses.If you have a deductible loss from a Presidentially declareddisaster area, you can elect to deduct that loss on your return oramended return for the immediately preceding tax year. If you makethis election, the loss is treated as having occurred in the precedingyear. TaxTip: Claiming a qualifying disaster loss on the previous year's returnmay result in a lower tax for that year, often producing or increasinga cash refund. You must make this election to take your casualty loss for thedisaster in the preceding year by the latest of the following dates. The due date (without extensions) for filing your tax returnfor the tax year in which the disaster actually occurred. The due date (with extensions) for the return for thepreceding tax year. If you timely filed the return for the preceding tax year,the date that is 6 months after the due date of the return (withoutextensions). (If you use this date to make the election, write,"Filed pursuant to section 301.9100-2" at the top of theamended return and file it at the same address you used for youroriginal return.) Interest abatement on underpayments in disaster areas.The IRS will abate interest for the length of the extension periodgranted to all taxpayers who meet both of the following requirements. They were located in an area declared a disaster area by thePresident. They were granted extensions to file income tax returns andpay income tax.