Best time to claim a disaster loss.

A disaster in an area qualifying for federal disaster relief can be devastating, whether or not there is adequate insurance. Taxwise, if you have a loss that’s not covered by your policy, you can partially recoup the loss through a tax deduction—the loss can be deducted in the year of the disaster or the prior year. Best strategy: Take the loss on the return where you get the greater tax benefit, usually the year in which you report the lower adjusted gross income.