The Internal Revenue Service has postponed until Oct. 15, 2013, the deadline to make an election to deduct losses for the preceding taxable year from Hurricane Sandy.

Notice 2013-21 postpones until Oct. 15, 2013, the deadline to make an election under Section 165(i) of the Tax Code to deduct in the preceding taxable year losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Last October, Hurricane Sandy struck the East Coast, causing severe damage in a number of states, the IRS noted. President Obama issued major disaster and emergency declarations under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, for certain areas. The Federal Emergency Management Agency determined certain areas within those states and the District of Columbia to be eligible for Public Assistance or Public Assistance and Individual Assistance under the Stafford Act.

Section 165(i) provides that if a taxpayer sustains a loss attributable to a federally declared disaster occurring in a disaster area, the taxpayer may elect to deduct that loss on their tax return for the taxable year immediately preceding the taxable year in which the disaster occurred.

Section 1.165-11(e) of the Income Tax Regulations requires a taxpayer to make the election by filing a return, an amended return or a refund claim on or before the later of: (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time for filing the return) for the taxable year in which the disaster actually occurred; or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time for filing the return) for the immediately preceding taxable year.

Section 1.165-11(e) provides that the return or claim should specify the date or dates of the disaster that gave rise to the loss, and the city, town, county and state in which the property that was damaged or destroyed was located at the time of the disaster. The election is irrevocable 90 days after the taxpayer makes it.

Section 7508A gives the Treasury Secretary the authority to postpone the time for performing certain acts under the tax laws for up to one year for a taxpayer affected by a federally declared disaster. Under that authority, the IRS is granting affected taxpayers a postponement until Oct. 15, 2013, to make an election under Section 165(i) for losses attributable to Hurricane Sandy.

To help the IRS identify affected taxpayers to ensure that they receive this postponement of the deadline to make the Section 165(i) election, they should include a reference to this notice, Notice 2013-21, with their return, amended return or refund claim on which they are making a postponed Section 165(i) election.

The return or claim should also include the other information requested in Section 1.165-11(e).