U.S. Income Tax Return for Estates and Trusts

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2025

Instructions for Form 4684
Casualties and Thefts
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments
For the latest information about developments related to
Form 4684 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form4684.

Expansion of mandatory postponement. The Filing
Relief for Natural Disasters Act expanded the mandatory
postponement of certain tax deadlines for disasters
declared after July 24, 2025. Taxpayers affected by
qualified state declared disasters may now qualify for the
postponement of certain tax deadlines such as filing or
paying income, excise, and employment taxes; and
making contributions to a traditional IRS or Roth IRA.
Additionally, the automatic 60-day extension for certain
federal tax deadlines is increased to 120 days for both
federally declared disasters and qualified state declared
disasters after July 24, 2025. For more information, see
Pub. 547, Casualties, Disasters, and Thefts.
Extended disaster tax relief benefits. P.L. 119-21,
commonly known as the One Big Beautiful Bill Act,
extended the special rules and return procedures for
personal casualty losses attributable to certain major
federal disasters declared between January 1, 2020, and
September 2, 2025. Qualified disaster losses can be
claimed on Form 4684. For more information, see
Qualified disaster losses.
Losses from financial scams. If you were a victim of a
financial scam involving a transaction entered into for
profit, you may be able to claim a theft loss deduction. For
more information, see Losses From Financial Scams.

Reminders
Qualified wildfire relief payments. Certain relief
payments received between 2020 and 2025 following a
wildfire disaster are not taxable. For more information on
income you may exclude and how to file an amended
return for an earlier tax year, see Qualified wildfire relief
payments, later.
East Palestine disaster relief payments. Certain relief
payments for the train derailment in East Palestine, Ohio,
on February 3, 2023, are not taxable. For more information
on payments that may be excluded and how to file an
amended return for an earlier tax year, see East Palestine
disaster relief payments, later.
How to report the loss on Form 1040-X. You should
adjust your deductions on Form 1040-X. The Instructions
Oct 31, 2025

Special rules and return procedures expanded for
claiming qualified disaster-related personal casualty
losses. The Taxpayer Certainty and Disaster Tax Relief
Act of 2019, the Taxpayer Certainty and Disaster Tax
Relief Act of 2020, and the Federal Disaster Tax Relief Act
of 2023 expanded the special rules and return procedures
for personal casualty losses attributable to certain major
federal disasters that were declared between 2018 and
February 10, 2025.
Qualified disaster losses in those tax years may be
claimed on Form 4684. See Qualified disaster loss, later,
for more information.
Tip: If applicable, you may have to file an amended return
on Form 1040-X to claim these benefits for a prior-year
return. Form 1040-X is available at IRS.gov/Form1040X.
Prior revisions of Form 4684 are available at IRS.gov/
Form4684.
Limitation on personal casualty and theft losses. For
tax years beginning after 2017, if you are an individual,
casualty or theft losses of personal-use property not
connected with a trade or business or a transaction
entered into for profit are deductible only if the loss is
attributable to a federally declared disaster. Theft losses
incurred in a transaction entered into for profit may still be
deductible.
Personal casualty and theft losses attributable to a
federally declared disaster are subject to the $100 per
casualty and 10% of your adjusted gross income (AGI)
reductions unless they are attributable to a qualified
disaster loss.
Personal casualty and theft losses attributable to a
qualified disaster loss are not subject to the 10% of the
AGI reduction and the $100 reduction is increased to
$500.
An exception to the rule above limiting the personal
casualty and theft loss deduction to losses attributable to
a federally declared disaster applies if you have personal

Instructions for Form 4684 (2025) Catalog Number 12998Z
Department of the Treasury Internal Revenue Service www.irs.gov

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What’s New

for Form 1040-X show how to do this. Explain the reasons
for your adjustment and attach Form 4684 to show how
you figured your loss. See Figuring a Loss in Pub. 547.
If the damaged or destroyed property was nonbusiness
property and you didn’t itemize your deductions on your
original return, you must first determine whether the
casualty loss deduction now makes it advantageous for
you to itemize. It is advantageous to itemize if the total of
the casualty loss deduction and any other itemized
deductions is more than your standard deduction (and
increased standard deduction amount, if applicable). If
you itemize, attach Schedule A (Form 1040) or
Schedule A (Form 1040-NR), and Form 4684 to your
amended return. Fill out Form 1040-X to refigure your tax
to find your refund.

TREASURY/IRS AND OMB USE ONLY DRAFT
casualty gains for the tax year. In this case, you will reduce
your personal casualty gains by any casualty losses not
attributable to a federally declared disaster. Any excess
gain is used to reduce losses from a federally declared
disaster.
For more information, see Disaster Losses, later, the
instructions for line 14, and Pub. 547.
Federal Emergency Management Agency (FEMA)
disaster declaration numbers. If you are reporting a
casualty or theft loss attributable to a federally declared
disaster, check the box and enter the DR or EM
declaration number assigned by FEMA in the space
provided above line 1 on your 2025 Form 4684. For
additional information, see FEMA disaster declaration
numbers, later.

Special rules for capital gains invested in qualified
opportunity funds (QOFs). If you have a capital gain for
2025, you can invest that gain into a QOF and elect to
defer part or all of the gain that you would otherwise
include in income until December 31, 2026. You may also
be able to permanently exclude gain from the sale or
exchange of an investment in a QOF if the investment is
held for at least 10 years. For information about how to
elect to use these special rules, see the Instructions for
Form 8949, Sales and Other Dispositions of Capital
Assets. For additional information, see Opportunity Zones
Frequently Asked Questions.
Deferral of gain invested in a QOF. If you realize a
gain from an actual, or deemed, sale or exchange with an
unrelated person and during the 180-day period beginning
on the date realizing the gain, invested an amount of the
gain in a QOF, you may be able to elect to temporarily
defer part or all of the gain that would otherwise be
included in income. If you make the election, the gain is
included in taxable income only to the extent, if any, that
the amount of realized gain exceeds the aggregate
amount invested in a QOF during the 180-day period
beginning on the date the gain was realized.
How to report. Report the gain as it would otherwise
be reported if you were not making the election. Report
the election for the amount invested in a QOF on Form
8949. See Form 8949 for how to make the election. You
will need to attach Form 8997 annually until you dispose
of the QOF investment. See the Form 8997 instructions for
more information.

General Instructions
Purpose of Form

Use Form 4684 to report gains and losses from casualties
and thefts. Attach Form 4684 to your tax return.

2

Three types of casualty losses are described in these
instructions.
1. Federal Casualty Losses.
2. Disaster Losses.
3. Qualified Disaster Losses.

All three types of losses refer to federally declared
disasters, but the requirements for each loss vary. A
federally declared disaster is a disaster determined by the
President of the United States to warrant assistance by
the federal government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (Stafford
Act). A federally declared disaster includes (a) a major
disaster declaration, or (b) an emergency declaration
under the Stafford Act.
Federal casualty loss. A federal casualty loss is an
individual’s casualty or theft loss of personal-use property
that is attributable to a federally declared disaster. The
casualty loss must occur in a state receiving a federal
disaster declaration. If you suffered a federal casualty
loss, you are eligible to claim a casualty loss deduction. If
you suffered a casualty or theft loss of personal-use
property that was not attributable to a federally declared
disaster, it is not a federal casualty loss, and you may not
claim a casualty loss deduction unless the exception
applies. Theft losses incurred in a transaction entered into
for profit may still be deductible. See the Caution under
Losses You Can Deduct, later.
Disaster loss. A disaster loss is a loss that is attributable
to a federally declared disaster and that occurs in an area
eligible for assistance pursuant to the Presidential
declaration. The disaster loss must occur in a county
eligible for public or individual assistance (or both).
Disaster losses are not limited to individual personal-use
property and may be claimed for individual business or
income-producing property and by corporations, S
corporations, and partnerships. If you suffered a disaster
loss, you are eligible to claim a casualty loss deduction
and to elect to claim the loss in the preceding tax year.
See Disaster Losses, later.
Qualified disaster loss. A qualified disaster loss
includes an individual’s casualty or theft loss of
personal-use property that is attributable to:
• A major disaster declared by the President under
section 401 of the Stafford Act in 2016;
• Hurricane Harvey;
• Tropical Storm Harvey;
• Hurricane Irma;
• Hurricane Maria;
• The California wildfires in 2017 and January 2018;
• A major disaster that was declared by the President
under section 401 of the Stafford Act and that
occurred in 2018 and before December 21, 2019, and
continued no later than January 19, 2020 (except
those attributable to the California wildfires in January
2018 that received prior relief); and
• A major disaster that was declared by the President
during the period between January 1, 2020, and
September 2, 2025. Also, this disaster must have an
Instructions for Form 4684 (2025)

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AMT adjustment for standard deduction made retroactively inapplicable to net qualified disaster losses.
The AMT adjustment for the standard deduction doesn’t
apply to the increase in the standard deduction that is
attributable to a net disaster loss. See Taxpayers who also
file the 2025 Form 6251, Alternative Minimum Tax for
Individuals, later, for more information.

Definitions

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incident period that began on or after December 28,
2019, and on or before July 4, 2025, and must have
ended no later than August 3, 2025.
Note: The definition of a qualified disaster loss does not
extend to any major disaster that has been declared only
by reason of COVID-19.
If you suffered a qualified disaster loss, you are eligible
to claim a casualty loss deduction, to elect to claim the
loss in the preceding tax year, and to deduct the loss
without itemizing other deductions on Schedule A (Form
1040). See Qualified disaster losses and Increased
standard deduction reporting, later.
See also IRS.gov/DisasterTaxRelief for date-specific
declarations associated with these disasters and for more
information.

Losses You Can Deduct

If the event causing you to suffer a personal casualty
loss occurred before January 1, 2018, but the casualty
loss was not sustained until January 1, 2018, or later, the
casualty loss is not deductible. See When To Deduct a
Loss, later, for more information on when a casualty loss is
sustained.
Caution: An exception to the rule limiting the deduction
for personal casualty and theft losses to federal casualty
losses applies where you have personal casualty gains to
the extent the losses don’t exceed your gains.
If your property is covered by insurance, and your loss
is otherwise deductible, you should file a timely insurance
claim for reimbursement of your loss. If you don’t file a
timely insurance claim, you can’t deduct the full
unrecovered amount as a casualty or theft loss and only
the part of the loss that isn’t covered by your insurance
policy is deductible.
Related expenses. The related expenses you have due
to a casualty or theft, such as expenses for the treatment
of personal injuries or for the rental of a car, aren’t
deductible as casualty or theft losses.
Costs for protection against future casualties aren’t
deductible but should be capitalized as permanent
improvements. An example would be the cost of a levee to
stop flooding.

Losses You Can’t Deduct

• Money or property misplaced or lost.
• Breakage of china, glassware, furniture, and similar
items under normal conditions.

• Progressive damage to property (buildings, clothes,
•

trees, etc.) caused by termites, moths, other insects,
or disease.
A decline in market value of stock, caused by
disclosure of accounting or other illegal misconduct by
the officers or directors of the corporation that issues
the stock, that was acquired on the open market for
investment. You may be able to deduct it as a capital

Instructions for Form 4684 (2025)

Note: Victims of scams and fraudulent investment
schemes may be eligible to claim a theft loss deduction if
certain conditions apply. See Losses From Financial
Scams and Losses From Ponzi-Type Investment
Schemes, later, for more information.

Gain on Reimbursement

If the amount you receive in insurance or other
reimbursement is more than the cost or other basis of the
property, you have a gain. If you have a gain, you may
have to pay tax on it or you may be able to postpone the
gain.
Don’t report the gain on damaged, destroyed, or stolen
property if you receive property that is similar or related to
it in service or use. Your basis in the new property is the
same as your basis in the old property.

Any tangible replacement property held for use in a
trade or business is treated as similar or related in service
or use to property held for use in a trade or business or for
investment if:
• The property you are replacing was damaged or
destroyed in a disaster, and
• The area in which the property was damaged or
destroyed was declared by the President of the United
States to warrant federal assistance because of that
disaster.
Generally, you must recognize the gain if you receive
unlike property or money as reimbursement. But you can
generally choose to postpone all or part of the gain if,
within 2 years of the end of the first tax year in which any
part of the gain is realized, you purchase:
• Property similar or related in service or use to the
damaged, destroyed, or stolen property; or
• A controlling interest (at least 80%) in a corporation
owning such property.
To postpone all of the gain, the cost of the replacement
property must be equal to or more than the reimbursement
you received for your property. If the cost of the
replacement property is less than the reimbursement
received, you must recognize the gain to the extent the
reimbursement exceeds the cost of the replacement
property.
If the replacement property or stock is acquired from a
related person, gain generally can’t be postponed by:
• Corporations (other than S corporations);
• Partnerships in which more than 50% of the capital or
profits interest is owned by corporations (other than S
corporations); or
• All other taxpayers, unless the aggregate realized
gains on the involuntarily converted property are
$100,000 or less for the tax year. This rule applies to
partnerships and S corporations at both the entity and
partner or shareholder level.
For details on how to postpone the gain, see Pub. 547.
If your main home was located in a disaster area and
that home or any of its contents were damaged or
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For tax years beginning after 2017, if you are an individual,
losses of personal-use property from fire, storm,
shipwreck, or other casualty, or theft are deductible only if
the loss is attributable to a federally declared disaster
(federal casualty loss). See Pub. 547 for more information.

loss on Schedule D (Form 1040) if the stock is sold or
exchanged or becomes completely worthless. See
chapter 4 of Pub. 550, Investment Income and
Expenses.

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destroyed due to the disaster, special rules apply. See
Gains Realized on Homes in Disaster Areas, later.

When To Deduct a Loss

Generally, you can deduct the part of your casualty or theft
loss that isn’t reimbursable in the tax year the casualty
occurred or the theft was discovered. However, a disaster
loss and a loss from deposits in insolvent or bankrupt
financial institutions may be treated differently. See
Disaster Losses and Special Treatment for Losses on
Deposits in Insolvent or Bankrupt Financial Institutions,
later.

If you are reimbursed for a loss you deducted in an
earlier year, include the reimbursement in your income in
the year you received it, but only to the extent the
deduction reduced your tax in an earlier year.
See Lessee’s loss in Pub. 547 for special rules on when
to deduct losses from casualties and thefts to leased
property.

Disaster Losses

A disaster loss is a loss that occurred in an area
determined by the President of the United States to
warrant federal disaster assistance and that is attributable
to a federally declared disaster. It includes a major
disaster or emergency declaration.
Tip: For a list of federally declared disasters and disaster
areas, see FEMA.gov/Disaster.
To determine the amount to deduct for a disaster loss,
you must take into account as reimbursements any
benefits you received or which you have a reasonable
possibility of receiving from federal or state programs to
restore your property.
Disaster year. The disaster year is the tax year in which
you sustained the loss attributable to a federally declared
disaster. Generally, a disaster loss is sustained in the year
the disaster occurred. However, a disaster loss may also
be sustained in a year after the disaster occurred. For
example, if a claim for reimbursement exists for which
there is a reasonable prospect of recovery, no part of the
loss for which reimbursement may be received is
sustained until it can be ascertained with reasonable
certainty whether you will be reimbursed.
Example. In December 2024, your car was destroyed
in severe flooding that occurred in the area where you live.
The area where you lived was designated by FEMA to be
eligible for public or individual assistance (or both). You
immediately filed a claim for reimbursement with your
insurance company. There was a reasonable prospect
that you would recover the full amount of your loss. The
claim was settled in January 2025 when your insurance
4

Caution: If you realize a gain from the reimbursement on
your casualty loss, do not report the gain until the year in
which that amount is received.
Election to deduct loss in the preceding year. If you
have a casualty loss from a federally declared disaster
that occurred in an area warranting public or individual
assistance (or both), you can elect to deduct the loss in
the tax year immediately before the disaster year. A list of
areas warranting public or individual assistance (or both)
is available at the FEMA website at FEMA.gov/Disaster.
To make this election for a loss in disaster year 2025,
complete Part I of Section D on your 2024 Form 4684 and
attach it to your 2024 original or amended return that
claims the disaster loss. See Section D—Election To
Deduct Federally Declared Disaster Loss in Preceding Tax
Year, later.
You must make an election to deduct a 2025 disaster
loss on your 2024 return on or before the date that is 6
months after the regular due date for filing your original
return (without extensions) for the disaster year. For
calendar year individual taxpayers, the deadline for
electing to take a 2025 disaster loss on your 2024 tax
return is October 15, 2026.
Revoking a prior election to deduct loss in the
preceding year. Complete Part II of Section D if you want
to revoke a 2024 disaster year election to deduct a
federally declared disaster loss in the preceding tax year.
Attach the completed Section D to an amended return for
the preceding year (that is, to an amended 2024 return for
the revocation of a 2025 disaster year election). See
Section D—Election To Deduct Federally Declared
Disaster Loss in Preceding Tax Year, later.
Your amended return revoking the election must be
filed on or before the date that is 90 days after the due
date for making the election and on or before the date you
file any return or amended return for the year that includes
the disaster loss.
Your amended return should refigure your tax liability as
a result of revoking the election. You must pay or make
arrangements to pay any tax and interest due as a result
of the revocation.
Home made unsafe by disaster. If your home was
located in a disaster area and your state or local
government ordered you to tear it down or move it
because it was no longer safe to use as a home due to the
disaster, the resulting loss in value is treated as a disaster
loss. The order for you to tear down or move the home
must have been issued within 120 days after the area was
officially declared a disaster area.
For purposes of figuring the disaster loss, use the value
of your home before you moved it or tore it down as its fair
market value after the casualty.
Instructions for Form 4684 (2025)

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If in the year of the casualty there is a claim for
reimbursement with a reasonable prospect of recovery,
the loss is not sustained until you know with reasonable
certainty whether such reimbursement will be received. If
you aren’t sure whether part of your casualty or theft loss
will be reimbursed, don’t deduct that part until the tax year
when you become reasonably certain that it won’t be
reimbursed. This later tax year is when your loss is
sustained.

company reimbursed you for only half of your loss. The
disaster year is 2025 (not 2024 when the loss occurred).
Your loss was sustained in 2025 because that’s when it
became reasonably certain whether you would be
reimbursed. You can either deduct the unreimbursed loss
on your tax return for the disaster year (2025) or make an
election to deduct the unreimbursed loss on your tax
return for the preceding year (2024).

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Note: The definition of a qualified disaster loss does not
extend to any major disaster that has been declared only
by reason of COVID-19.
If you suffered a qualified disaster loss, you are eligible
to claim a casualty loss deduction, to elect to claim the
loss in the preceding tax year, and to deduct the loss
without itemizing other deductions on Schedule A (Form
1040).
For specific instructions for reporting these qualified
disaster losses, see Line 11 and Line 15, later. See
IRS.gov/DisasterTaxRelief for date-specific declarations
associated with these disasters and for more information.
Note: You can deduct qualified disaster losses without
itemizing other deductions on Schedule A. Moreover, your
net casualty loss from these qualified disasters doesn’t
need to exceed 10% of your adjusted gross income (AGI)
to qualify for the deduction, but the $100 limit per casualty
is increased to $500. See Increased standard deduction
reporting next for more information.
Increased standard deduction reporting. If you have a
net qualified disaster loss and aren’t itemizing your
deductions, you can claim an increased standard
deduction using Schedule A (Form 1040) or Schedule A
(Form 1040-NR), by doing the following.
1. Enter the amount from Form 4684, line 15, on the
dotted line next to line 16 on Schedule A (Form 1040),
or line 7 of Schedule A (Form 1040-NR), and the
description “Net Qualified Disaster Loss.”
2. Also, enter on the dotted line next to line 16 of
Schedule A (Form 1040) or line 7 of Schedule A
(Form 1040-NR), your standard deduction amount
and the description “Standard Deduction Claimed
With Qualified Disaster Loss.”
3. Combine these two amounts and enter the total in the
entry space on line 16 of Schedule A (Form 1040), or
line 7 of Schedule A (Form 1040-NR), and on Form
Instructions for Form 4684 (2025)

1040 or Form 1040-SR, line 12e, or Form 1040-NR,
line 12.
Caution: Nonresident aliens cannot claim the standard
deduction. However, there is an exception. Students or
business apprentices, who file Form 1040-NR, may be
able to take a standard deduction if they are eligible for
benefits under Article 21(2) of the United States-India
Income Tax Treaty. They will enter the standard deduction
amount found for their filing status on Form 1040 or
1040-SR. See chapter 5 of Pub. 519 and the Instructions
for Form 1040-NR for details.
Caution: The alternative minimum tax adjustment for the
standard deduction is made retroactively inapplicable to
net qualified disaster losses. See Taxpayers who also file
the 2025 Form 6251, Alternative Minimum Tax for
Individuals, later, for more information.
More information. See Pub. 547 for more information
about disaster losses.

Gains Realized on Homes in Disaster
Areas

The following rules apply if your main home was located in
an area declared by the President of the United States to
warrant federal assistance as the result of a disaster, and
the home or any of its contents were damaged or
destroyed due to the disaster. These rules also apply to
renters who receive insurance proceeds for damaged or
destroyed property in a rented home that is their main
home.
1. No gain is recognized on any insurance proceeds
received for unscheduled personal property that was
part of the contents of the home.
2. Any other insurance proceeds you receive for the
home or its contents are treated as received for a
single item of property, and any replacement property
you purchase that is similar or related in service or
use to the home or its contents is treated as similar or
related in service or use to that single item of property.
Therefore, you can choose to recognize gain only to
the extent the insurance proceeds treated as received
for that single item of property exceed the cost of the
replacement property.
3. If you choose to postpone any gain from the receipt of
insurance or other reimbursement for your main home
or any of its contents, the period in which you must
purchase replacement property is extended until 4
years after the end of the first tax year in which any
part of the gain is realized.
For details on how to postpone gain, see Pub. 547.
Example. Your main home and its contents were
completely destroyed in 2025 by a tornado in a federally
declared disaster area. In 2025, you received insurance
proceeds of $200,000 for the home, $25,000 for
unscheduled personal property in your home, $5,000 for
jewelry, and $10,000 for a stamp collection.
No gain is recognized on the $25,000 of insurance
proceeds you received for the unscheduled personal
property.
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Qualified disaster losses. A qualified disaster loss
includes an individual’s casualty or theft loss of
personal-use property that is attributable to:
• A major disaster declared by the President under
section 401 of the Stafford Act in 2016;
• Hurricane Harvey;
• Tropical Storm Harvey;
• Hurricane Irma;
• Hurricane Maria;
• The California wildfires in 2017 and January 2018;
• A major disaster that was declared by the President
under section 401 of the Stafford Act and that
occurred in 2018 and before December 21, 2019, and
continued no later than January 19, 2020 (except
those attributable to the California wildfires in January
2018 that received prior relief); and
• A major disaster that was declared by the President
during the period between January 1, 2020, and
September 2, 2025. Also, this disaster must have an
incident period that began on or after December 28,
2019, and on or before July 4, 2025, and must have
ended no later than August 3, 2025.

The jewelry and stamp collection were kept in your
home and were scheduled property on your insurance
policy. Your home and its replacement contents are
considered a single item of property for the purpose of
recognizing gain on the involuntary conversion of your
home and its contents.
If you reinvest $215,000 in a replacement home and its
replacement contents, you can elect to postpone any gain
on your home, jewelry, or stamp collection.
If you reinvest less than the remaining $215,000 of
insurance proceeds in a replacement home and its
replacement contents, you may have to recognize any
gain to the extent the $215,000 of insurance proceeds
exceeds the amount you invest in a replacement home
and its replacement contents.
See Pub. 523, Selling Your Home, for more information
on gain that may be excluded on a sale, including the
receipt of insurance proceeds for a destruction of your
home. Also see Pub. 547 for more information on rules for
postponing gain, including rules for when the main home
is located in a disaster area.
To postpone the gain, you must purchase the
replacement property before 2030. Your basis in the
replacement property equals its cost decreased by the
amount of any postponed gain.

Other Disaster Issues

• Lost wages (other than compensation paid by an

•
•

employer who would have otherwise paid your
wages),
Personal injury or death, or
Emotional distress.

You cannot take a credit or deduction, or increase the
basis in your property, related to any expense for which
you were compensated by a qualified wildfire relief
payment.
Tip: If you did not exclude from your income certain
qualified wildfire relief payments or East Palestine disaster
relief payments, you may need to file an amended return
on Form 1040-X to claim these benefits. Form 1040-X is
available at IRS.gov/Form1040X. Prior revisions of Form
4684 are available at IRS.gov/Form4684.

Special Treatment for Losses on
Deposits in Insolvent or Bankrupt
Financial Institutions
Caution: You can no longer claim a loss on a deposit in
an insolvent or bankrupt financial institution as a personal
casualty or theft loss unless the exception mentioned
under the Caution under Losses You Can Deduct, earlier,
applies. See Pub. 547 for more information.

Damage From Corrosive Drywall

East Palestine disaster relief payments. Certain relief
payments related to the train derailment in East Palestine,
Ohio, on February 3, 2023, are not taxable. The payment
can be excluded from income if it was provided by a
government agency or Norfolk Southern Railway
(including any subsidiary, insurer, agent, or related
person) and received on or after February 3, 2023.
Further, the amount must have been paid to you to
compensate for the following:
• Loss, damages, or expenses.
• Loss in real property value.
• Closing costs with respect to real property (including
realtor commissions).
• Inconvenience (including access to real property).

If you suffered property losses due to the effects of certain
imported drywall installed in homes between 2001 and
2009, under a special procedure, you may be able to
claim a casualty loss deduction for amounts you paid to
repair damage to your home and household appliances
that resulted from corrosive drywall. For details, see
Special Procedure for Damage From Corrosive Drywall
under Casualty in Pub. 547.

Caution: Qualified disaster relief payments don’t include:
• Payments for expenses otherwise paid for by
insurance or other reimbursements; or
• Income replacement payments, such as payments of
lost wages, lost business income, or unemployment
compensation.

Specific Instructions

Qualified wildfire relief payments. Certain qualified
wildfire relief payments are not taxable to the extent your
losses, expenses, or damages compensated by these
payments were not otherwise compensated for by
insurance or other reimbursement. You can exclude
qualified wildfire relief payments you received between
January 1, 2020, and December 31, 2025, for any forest
or range fire declared a federal disaster in 2015 or a later
year.
Qualified wildfire relief payments include any amount
you receive for losses, expenses, or damages, including
compensation for:
• Additional living expenses,
6

Caution: Because the personal casualty losses claimed
under this special procedure are not attributable to a
federally declared disaster, they’re only deductible to the
extent such losses don’t exceed your personal casualty
gains.

Which Sections To Complete

Use Section A to figure casualty or theft gains and losses
for property that isn’t used in a trade or business or for
income-producing purposes. Also use Section A to figure
casualty or theft losses and gains related to the portion of
your home used for business if you used the simplified
method to determine your deductible expenses for
business use of your home.
Use Section B to figure casualty or theft gains and
losses for property that is used in a trade or business or
for income-producing purposes.
If property is used partly in a trade or business and
partly for personal purposes, such as a personal home
with a rental unit, figure the personal part in Section A and
the business part in Section B.
Instructions for Form 4684 (2025)

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TREASURY/IRS AND OMB USE ONLY DRAFT
Use Section C to figure a theft loss deduction from a
Ponzi-type investment scheme if you qualify to use
Revenue Procedure 2009-20, as modified by Revenue
Procedure 2011-58, and choose to follow the procedures
in the guidance. Section C of Form 4684 replaces
Appendix A in Revenue Procedure 2009-20. You don’t
need to complete Appendix A. See Losses From
Ponzi-Type Investment Schemes, later.
Use Section D to elect (or revoke an election) to deduct
in the immediately preceding tax year a loss that was
attributable to a federally declared disaster and occurred
in a federally declared disaster area.

Section A—Personal-Use Property

Use a separate Form 4684 through line 12 for each
casualty or theft involving property not used in a trade or
business or for income-producing purposes. For example,
use a separate Form 4684 through line 12 for property lost
or damaged due to any qualified disaster described in
Qualified disaster loss, earlier.
Don’t include any loss previously deducted on an
estate tax return.
If you are liable for casualty or theft losses to property
you lease from someone else, see Leased property under
Figuring a Loss in Pub. 547.
FEMA disaster declaration numbers. If you are
reporting a casualty or theft loss attributable to a federally
declared disaster, check the box and enter the DR or EM
declaration number assigned by FEMA in the space
provided above line 1 on your 2025 Form 4684. A list of
federally declared disasters and FEMA disaster
declaration numbers is available at FEMA.gov/Disaster.
The FEMA disaster declaration number consists of the
letters “DR” and four numbers, or the letters “EM” and four
numbers. For example, enter “DR-4865” in the respective
entry spaces for the Arkansas Severe Storms and
Tornadoes.

Line 1
Describe the type of property (for example, furniture,
jewelry, car, etc.). If you are reporting a loss attributable to
a federally declared disaster, and you checked the box
and entered the FEMA disaster declaration number in the
space provided above line 1, enter the ZIP code for the
property most affected on the line for Property A.

Line 2
Cost or other basis usually means original cost plus
improvements. Subtract any postponed gain from the sale
of a previous main home. Special rules apply to property
received as a gift or inheritance. See Basis Other Than
Cost in Pub. 551 for details. If you inherited the property
from someone who died in 2010 and the executor of the
decedent’s estate made the election to file Form 8939,
Instructions for Form 4684 (2025)

Line 3
Enter on this line the amount of insurance or other
reimbursement you received or expect to receive for each
property. Include your insurance coverage whether or not
you are filing a claim for reimbursement. For example,
your car worth $2,000 is totally destroyed in a flood in an
area designated as a federal disaster. You are insured with
a $500 deductible, but decide not to report it to your
insurance company because you are afraid the insurance
company will cancel your policy. In this case, enter $1,500
on this line.
If you expect to be reimbursed but haven’t yet received
payment, you must still enter the expected reimbursement
from the loss. If, in a later tax year, you determine with
reasonable certainty that you won’t be reimbursed for all
or part of the loss, you can deduct for that year the amount
of the loss that isn’t reimbursed.
Types of reimbursements. Insurance is the most
common way to be reimbursed for a casualty or theft loss,
but if:
• Part of a federal disaster loan is forgiven, the part you
don’t have to pay back is considered a
reimbursement;
• The person who leases your property must make
repairs or must repay you for any part of a loss, the
repayment and the cost of the repairs are considered
reimbursements;
• A court awards you damages for a casualty or theft
loss, the amount you are able to collect, minus
lawyers’ fees and other necessary expenses, is a
reimbursement;
• You accept repairs, restoration, or cleanup services
provided by relief agencies, it is considered a
reimbursement; or
• A bonding company pays you for a theft loss, the
payment is also considered a reimbursement.
Lump-sum reimbursement. If you have a casualty or
theft loss of several assets at the same time and you
receive a lump-sum reimbursement, you must divide the
amount you receive among the assets according to the
fair market value of each asset at the time of the loss.
Grants, gifts, and other payments. Grants and other
payments you receive to help you after a casualty are
considered reimbursements only if they must be used
specifically to repair or replace your property. Such
payments will reduce your casualty loss deduction. If there
are no conditions on how you have to use the money you
receive, it isn’t a reimbursement.
Use and occupancy insurance. If insurance reimburses
you for your loss of business income, it doesn’t reduce
your casualty or theft loss. The reimbursement is income
and is taxed in the same manner as your business
income.
7

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Use a separate column for lines 2 through 9 to show each
item lost or damaged from a single casualty or theft
described on line 1. If more than four items were lost or
damaged, use additional sheets following the format of
lines 1 through 9.

Allocation of Increase in Basis for Property Received From
a Decedent, refer to the information provided by the
executor or see Pub. 4895, Tax Treatment of Property
Acquired From a Decedent Dying in 2010, available at
IRS.gov/Pub/IRS-Prior/p4895--2011.pdf.

TREASURY/IRS AND OMB USE ONLY DRAFT
Main home destroyed. If you have a gain because your
main home was destroyed, you can generally exclude the
gain from your income as if you had sold or exchanged
your home. You may be able to exclude up to $250,000 of
the gain (up to $500,000 if married filing jointly). To
exclude a gain, you must generally have owned and lived
in the property as your main home for at least 2 years
during the 5-year period ending on the date it was
destroyed. For information on this exclusion, see Pub.
523.
If you exclude the gain and the entire gain is
excludable, don’t report the casualty on Form 4684. If the
gain is more than you can exclude, reduce the insurance
or other reimbursement by the amount of the exclusion
and enter the result on line 3. Attach a statement showing
the full amount of insurance or other reimbursement and
the amount of the exclusion. You may be able to postpone
reporting the excess gain if you buy replacement property.
See Gain on Reimbursement and Gains Realized on
Homes in Disaster Areas, earlier.

If you are entitled to an insurance payment or other
reimbursement for any part of a casualty or theft loss but
you choose not to file a claim for the loss, you can’t realize
a gain from that payment or reimbursement. Therefore,
figure the gain on line 4 by subtracting your cost or other
basis in the property (line 2) only from the amount of
reimbursement you actually received. Enter the result on
line 4, but don’t enter less than zero.
If you filed a claim for reimbursement but didn’t receive
it until after the year of the casualty or theft, include the
gain in your income in the year you received the
reimbursement.

Lines 5 and 6
Fair market value (FMV) is the price at which the property
would be sold between a willing buyer and a willing seller,
each having knowledge of the relevant facts. The
difference between the FMV immediately before the
casualty or theft and the FMV immediately after
represents the decrease in FMV because of the casualty
or theft.
The FMV of property after a theft is zero if the property
isn’t recovered.
FMV is generally determined by a competent appraisal.
The appraiser’s knowledge of sales of comparable
property about the same time as the casualty or theft,
knowledge of your property before and after the
occurrence, and the methods of determining FMV are
important elements in proving your loss.
The appraised value of property immediately after the
casualty must be adjusted (increased) for the effects of
any general market decline that may occur at the same
time as the casualty or theft. For example, the value of all
nearby property may become depressed because it is in
an area where such occurrences are commonplace. This
8

Replacement cost or the cost of repairs isn’t
necessarily FMV. However, you may be able to use the
cost of repairs to the damaged property as evidence of
loss in value if:
• The repairs are actually made;
• The repairs are necessary to restore the property to
the condition it was in immediately before the
casualty;
• The amount spent for repairs isn’t excessive;
• The repairs only correct the damage caused by the
casualty; and
• The value of the property after the repairs isn’t, as a
result of the repairs, more than the value of the
property immediately before the casualty.
To figure a casualty loss to real estate not used in a
trade or business, or for income-producing purposes,
measure the decrease in value of the property as a whole.
All improvements, such as buildings, trees, and shrubs,
are considered together as one item. Figure the loss
separately for other items. For example, figure the loss
separately for each piece of furniture.
Safe harbor methods for determining casualty and
theft losses. See Revenue Procedure 2018-08, 2018-2
I.R.B. 286, available at IRS.gov/IRB/2018-02_IRB, for safe
harbor methods that you may use in determining the
amount of your casualty and theft losses for your home
and personal belongings.
Safe harbor reporting requirements for Form 4684.
If you use one of the safe harbor methods provided in
Revenue Procedure 2018-08, you must attach a
statement to Form 4684 stating that you used Revenue
Procedure 2018-08 to determine the amount of your
casualty loss. Include the specific safe harbor method
used. When completing Form 4684, do not enter an
amount on line 5 or line 6 for each property. Instead, enter
the decrease in the FMV determined in the relevant safe
harbor method on line 7.

Line 11
If you sustained a qualified disaster loss, including those
sustained in 2025, add the amounts on line 4 of all Forms
4684. Compare the sum with the amount on line 10. If the
amount on line 10 is larger, enter $500 on line 11 of the
Form 4684 reporting the qualified disaster losses.
If the amount on line 10 is smaller, or if you are
reporting a disaster loss, enter $100 and complete the
remainder of the form without applying the special rules
for qualified disaster losses.

Line 13
Enter on this line the amounts from line 4 of all Forms
4684 reporting a gain.

Line 14
Note: An exception to the rule that disallows a deduction
for personal casualty and theft losses other than those
Instructions for Form 4684 (2025)

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Line 4

general decline in market value isn’t part of the property’s
decrease in FMV as a result of the casualty or theft.

TREASURY/IRS AND OMB USE ONLY DRAFT
attributable to federally declared disasters applies if you
have personal casualty gains reported on line 13 of your
Form 4684. You will deduct the portion of your personal
casualty losses not attributable to a federally declared
disaster to the extent the loss doesn’t exceed your
personal casualty gains. Any remaining personal casualty
gains will be used to reduce the amount of your deductible
federal casualty losses.
If you have personal casualty losses that are not
attributable to a federally declared disaster, such as those
described above, use Worksheet 1-1 to calculate the
amount you should enter on line 14. Otherwise, add the
amounts on line 12 of all Forms 4684 and enter that total
on line 14.

Worksheet 1-1. Losses Not Attributable to a
Federally Declared Disaster—Line 14

2. Add the amounts from line 12 of all
Forms 4684 reporting losses
attributable to a federally declared
disaster. . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter the smaller of line 1 or line 13 of
Form 4684 . . . . . . . . . . . . . . . . . . . . 3.
4. Add lines 2 and 3. Enter the result
here and on Form 4684,
line 14 . . . . . . . . . . . . . . . . . . . . . . . 4.

Line 15
Note: You will complete line 15 differently depending on
whether you have a net gain or loss and whether you have
a qualified disaster loss.
Net gain. If line 13 is more than line 14, you have a net
gain. Report the gain as follows.
• Combine your short-term gains with your short-term
losses and include the net short-term gain or (loss) on
Schedule D (Form 1040), line 4. Estates and trusts
include this amount on Schedule D (Form 1041),
line 4.
• Combine your long-term gains with your long-term
losses and include the net long-term gain or (loss) on
Schedule D (Form 1040), line 11. Estates and trusts
include this amount on Schedule D (Form 1041),
line 11.
The holding period for long-term gains and losses is
more than 1 year. For short-term gains and losses, it is 1
year or less. To figure the holding period, begin counting
on the day after you received the property and include the
day the casualty or theft occurred.
Generally, if you inherit property, you are considered to
have held the property for longer than 1 year, regardless
of how long you actually held it. If you inherited property
from someone who died in 2010 and the executor made
the election to file Form 8939, refer to the information
provided by the executor or see Pub. 4895, available at
Instructions for Form 4684 (2025)

Net loss. If line 13 is less than line 14 and you have
qualified disaster losses subject to the $500 reduction on
line 11 on any Form(s) 4684:
• Subtract line 13 from line 14. Enter the smaller of this
difference or the amount on line 12 of the Form 4684
listing those qualified disaster losses. The amount is
your net qualified disaster loss. If you are itemizing
your deductions, enter the amount on line 16 of
Schedule A (Form 1040), or line 7 of Schedule A
(Form 1040-NR), and “Net Qualified Disaster Loss.” If
you are claiming the increased standard deduction,
enter the amount on line 16 of Schedule A (Form
1040), or line 7 of Schedule A (Form 1040-NR), and
“Net Qualified Disaster Loss.” Also, do not include this
amount on line 15 of Schedule A (Form 1040), or
line 6 of Schedule A (Form 1040-NR), if you are not
itemizing your deductions.
Complete the rest of Schedule A either by:

• Itemizing other deductions as usual; or
• Including the amount of your standard deduction on

the dotted line next to Schedule A (Form 1040),
line 16, or Schedule A (Form 1040-NR), line 7. Also,
enter “Standard Deduction Claimed With Qualified
Disaster Loss” on that dotted line next to this amount.
See the instructions for Schedule A (Form 1040) or
the Instructions for Form 1040-NR for more
information. If you are also filing Form 6251, see
Taxpayers who also file the 2025 Form 6251,
Alternative Minimum Tax for Individuals, next.

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1. Add the amounts from line 12 of all
Forms 4684 reporting losses not
attributable to a federally declared
disaster . . . . . . . . . . . . . . . . . . . . . . 1.

IRS.gov/Pub/IRS-Prior/p4895--2011.pdf, to determine
your holding period.

Don’t complete the rest of this section if all your
personal casualty and theft losses are qualified disaster
losses subject to the $500 reduction.
If line 13 is less than line 14 and you have no qualified
disaster losses subject to the $500 reduction on line 11 of
your Form 4684, enter zero and go to line 16 and
complete the rest of the section.
Taxpayers who also file the 2025 Form 6251,
Alternative Minimum Tax for Individuals. If you file
Schedule A (Form 1040) or Schedule A (Form 1040-NR)
just to claim an increased standard deduction on Form
1040, 1040-SR, or 1040-NR, due to a loss you suffered
related to property in a federally declared disaster area,
enter zero on Form 6251, line 2a. Next, include the
amount of your standard deduction (before it is increased
by any net qualified disaster loss) in the total on line 3.
This is the amount you listed on the dotted line next to
Schedule A (Form 1040), line 16 or Schedule A (Form
1040-NR), line 7.
If you filed Schedule A to itemize your deductions, then
don’t make this adjustment.

Line 17
Estates and trusts figure AGI in the same way as
individuals, except that the costs of administration are
allowed in figuring AGI.

9

TREASURY/IRS AND OMB USE ONLY DRAFT
Section B—Business and Income-Producing
Property

Caution: You can no longer claim any miscellaneous
itemized deductions. As a result, business casualty and
theft losses of property used in performing services as an
employee cannot be deducted or applied in the netting
process to offset gains.
Use a separate column of Part I, lines 20 through 27, to
show each item lost or damaged from a single casualty or
theft described on line 19. If more than four items were
lost or damaged, use additional sheets following the
format of Part I, lines 19 through 27.
Use a separate Form 4684, Section B, Part I, for each
casualty or theft involving property used in a trade or
business or for income-producing purposes. Use one
Section B, Part II, to combine all Sections B, Part I.
For details on the treatment of casualties or thefts to
business or income-producing property, including rules on
the loss of inventory through casualty or theft, see Figuring
a Loss in Pub. 547.

A gain or loss from a casualty or theft of property used in a
passive activity isn’t taken into account in determining the
loss from a passive activity unless losses similar in cause
and severity recur regularly in the activity. See Form 8582,
Passive Activity Loss Limitations, and its instructions for
details.

Losses From Ponzi-Type Investment Schemes
The IRS has issued the following guidance to assist
taxpayers who are victims of losses from Ponzi-type
investment schemes.
• Revenue Ruling 2009-9, 2009-14 I.R.B. 735 (available
at IRS.gov/irb/2009-14_IRB#RR-2009-9).
• Revenue Procedure 2009-20, 2009-14 I.R.B. 749
(available at IRS.gov/irb/2009-14_IRB#RP-2009-20).
• Revenue Procedure 2011-58, 2011-50 I.R.B. 849
(available at IRS.gov/irb/2011-50_IRB#RP-2011-58).
If you qualify to use Revenue Procedure 2009-20, as
modified by Revenue Procedure 2011-58, and choose to
follow the procedures in the guidance, first fill out
Section C to determine the amount to enter on Section B,
line 28. Skip lines 19 through 27. Section C of Form 4684
replaces Appendix A in Revenue Procedure 2009-20. You
don’t need to complete Appendix A.

The IRS has issued guidance to assist taxpayers who are
victims of financial scams. Victims of certain scams may
claim a theft loss deduction under section 165 if all the
following conditions apply.
• The loss must result from criminal conduct classified
as theft under applicable state law.
• The taxpayer must have no reasonable prospect of
recovering the stolen funds.
• The loss must arise from a transaction entered into for
profit.

If you choose not to use the procedures in Revenue
Procedure 2009-20, you may claim your theft loss by filling
out Section B, lines 19 through 39, as appropriate.

If you were the victim of a financial scam, review advice
memorandum number 202511015 for additional guidance.

Section 179 Property of a Partnership or S
Corporation

Home Used for Business or Rented Out

Partnerships and S corporations that have a casualty or
theft involving property for which the section 179 expense
deduction was previously claimed and passed through to
the partners or shareholders must not use Form 4684 to
report the transaction. Instead, see the Instructions for
Form 4797 for details on how to report it. Partners and S
corporation shareholders who receive a Schedule K-1
reporting such a transaction should see the Instructions
for Form 4797 for details on how to figure the amount to
enter on Form 4684, line 20.

If you had a casualty or theft loss involving a home you
used for business or rented out, your deductible loss may
be limited. First, complete Form 4684, Section B, lines 19
through 26. If the loss involved a home used for a
business for which you are filing Schedule C (Form 1040),
Profit or Loss From Business, figure your deductible
casualty or theft loss on Form 8829, Expenses for
Business Use of Your Home (if you are using Form 8829).
Enter on Form 4684, line 27, the deductible loss from
Form 8829, line 35, and “See Form 8829” above line 27.
For a home you rented out or used for a business for
which you aren’t filing Schedule C (Form 1040), see
section 280A(c)(5) to figure your deductible loss. Attach a
statement showing your computation of the deductible
loss, enter that amount on line 27, and enter “See
attached statement” above line 27.
If you used the simplified method to determine your
deductible expenses for business use of your home for
2025, figure the casualty or theft loss for the home office in
Section A instead of on Form 8829 and Section B.
10

For more information, see the instructions for
Section C, later, and the above revenue ruling and
revenue procedures.

Line 19
If you are claiming a loss from a fraudulent investment
arrangement and you are not filling out Section C, you
must enter the name, taxpayer identification number (if
known), and address (if known) of the individual or entity
that conducted the fraudulent arrangement. Complete the
rest of Section B, Part I.

Line 20
Cost or adjusted basis usually means original cost plus
improvements, minus depreciation allowed or allowable
Instructions for Form 4684 (2025)

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Losses From Financial Scams

Property Used in a Passive Activity

TREASURY/IRS AND OMB USE ONLY DRAFT

If you dispose of a portion of a Modified Accelerated
Cost Recovery System (MACRS) asset as a result of a
casualty event, enter the adjusted basis of the disposed
portion of the asset. MACRS assets include buildings (and
their structural components) and other tangible
depreciable property placed in service after 1986 that is
used in a trade or business or for the production of
income. The adjusted basis of the disposed portion of the
asset is the adjusted depreciable basis of that disposed
portion at the time of its disposition, as determined under
the applicable convention. You must reduce the basis and
the depreciation reserve of the MACRS asset by the basis
and depreciation reserve attributable to the disposed
portion as of the first day of the tax year, before you
compute the depreciation deduction for the current year.
To figure the depreciation deductions for the remaining
MACRS asset and the disposed portion, see the
instructions for Form 4562, line 19, column (g). For more
information, see Regulations section 1.168(i)-8. For partial
dispositions from casualties to MACRS assets accounted
for in a General Asset Account, see Regulations section
1.168(i)-1.

Line 21
See the instructions for line 3, earlier.

Line 22
See the instructions for line 4, earlier.

Lines 23 and 24
See the instructions for lines 5 and 6 for details on
determining FMV.
Loss on each item figured separately. Unlike a
casualty loss to personal-use real estate, in which all
improvements are considered one item, a casualty loss to
business or income-producing property must be figured
separately for each item. For example, if casualty damage
occurs to both a building and to trees on the same piece
of real estate, measure the loss separately for the building
and for the trees.

Line 28
If the amount on line 28 includes losses on property held 1
year or less, and losses on property held for more than 1
year, you must allocate the amount between lines 29 and
34 according to how long you held each property. Enter on
line 29 all gains and losses on property held 1 year or
less. Enter on line 34 all gains and losses on property held
Instructions for Form 4684 (2025)

more than 1 year, except as provided in the instructions for
line 33.
If you are claiming a theft loss from a Ponzi-type
investment scheme and are following the procedures in
Revenue Procedure 2009-20, 2009-14 I.R.B. 749, enter
on line 28 the amount from Section C, line 51. Don’t
complete Section B, lines 19 through 27, of Form 4684 for
that loss. You must fill out Section B, Part II.

Part II, Column (a)
On lines 29 and 34, use a separate line to identify each
casualty or theft. If you have more than two casualties or
thefts, attach an additional sheet following the format of
lines 29 and 34.
Example. Ishmael is claiming two casualty losses for
his business property. One loss is due to a fire in July and
the other loss is due to a hurricane in October. He fills out
one Section B, Part I, for the fire and another separate
Section B, Part I, for the hurricane. He held the property
for 1 year or less. He fills out only one Section B, Part II, to
summarize the two losses he is claiming. On line 29, he
enters “Fire” on the first line and “Hurricane” on the
second line.
Tip: If you are claiming a theft loss from a Ponzi-type
investment scheme, enter the name of the individual or
entity that conducted the fraudulent arrangement.

Part II, Column (b)(i)
Enter the part of line 28 from trade, business, rental, or
royalty property.

Part II, Column (b)(ii)
Enter the part of line 28 from income-producing property.
Income-producing property is property held for
investment, such as stocks, notes, bonds, gold, silver,
vacant lots, and works of art.

Part II, Column (c)
On line 29, enter the part of line 22 that is from property
held for 1 year or less.
On line 34, enter the part of line 22 that is from property
held for more than 1 year.

Line 30
Include in the total any amounts from the additional sheet
you attached because you had more than two casualties
or thefts on line 29.

Line 31
If Form 4797, Sales of Business Property, isn’t otherwise
required, enter the amount from this line on your Schedule
1 (Form 1040), line 4 and check the “4684” box.
11

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(including any section 179 expense deduction),
amortization, depletion, etc. Special rules apply to
property received as a gift or inheritance. See Basis Other
Than Cost in Pub. 551 for details. If you inherited the
property from someone who died in 2010 and the
executor of the decedent’s estate made the election to file
Form 8939, refer to the information provided by the
executor or see Pub. 4895, available at IRS.gov/Pub/IRSPrior/p4895--2011.pdf.

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Line 32

Line 40

Estates and trusts, enter the amount from line 32 on the
“Other deductions” line of your tax return. Partnerships,
enter on Form 1065, Schedule K, line 13e. S corporations,
enter on Form 1120-S, Schedule K, line 12e. Next to that
line, enter “Form 4684.”

Enter the initial amount of cash or basis of property that
you invested in the investment arrangement. Don’t include
any of the following on this line, line 41, or line 42.
• Amounts borrowed from the responsible group and
invested in the specified fraudulent arrangement, to
the extent the borrowed amounts weren’t repaid at the
time the theft was discovered.
• Amounts such as fees that were paid to the
responsible group and deducted for federal income
tax purposes.
• Amounts reported to you (the qualified investor) as
taxable income that weren’t included in gross income
on the investor’s federal income tax returns.
• Cash or property that you (the qualified investor)
invested in a fund or other entity (separate from you
(the qualified investor) for federal income tax
purposes) that invested in a specified fraudulent
arrangement.

Line 33
If you had a casualty or theft gain from certain trade,
business, or income-producing property held more than 1
year, you may have to recapture part or all of the gain as
ordinary income. See the instructions for Form 4797, Part
III, for more information on the types of property subject to
recapture. If recapture applies, complete Form 4797, Part
III, and this line, instead of Form 4684, line 34.

Line 35

Line 38a
Taxpayers, other than partnerships and S corporations, if
Form 4797 isn’t otherwise required, enter the amount from
this line on the appropriate line for the form you are filing.
Form 1040, 1040-SR, or 1040-NR filers. Enter this
amount on your Schedule 1 (Form 1040), line 4 and check
the “4684” box.
Form 1120, 1120-F, and 1120-POL filers. See the
Instructions for Schedule D (Form 1120) for where to
report this amount.

Section C—Theft Loss Deduction for Ponzi-Type
Investment Scheme Using the Procedures in
Revenue Procedure 2009-20
Fill out Section C if you claim a theft loss deduction for a
Ponzi-type investment scheme and you meet both of the
following conditions.
• You qualify to use Revenue Procedure 2009-20, as
modified by Revenue Procedure 2011-58.
• You choose to follow the procedures in the guidance.
If you meet both conditions, fill out Section C in lieu of
Appendix A in Revenue Procedure 2009-20.

For more information about claiming a theft loss
deduction from a Ponzi-type investment scheme, see the
following guidance.
• Revenue Ruling 2009-9, 2009-14 I.R.B. 735 (available
at IRS.gov/irb/2009-14_IRB#RR-2009-9).
• Revenue Procedure 2009-20, 2009-14 I.R.B. 749
(available at IRS.gov/irb/2009-14_IRB#RP-2009-20).
• Revenue Procedure 2011-58, 2011-50 I.R.B. 849
(available at IRS.gov/irb/2011-50_IRB#RP-2011-58).
Caution: Don’t fill out Section C if you don’t qualify to use
the procedures in Revenue Procedure 2009-20, as
modified by Revenue Procedure 2011-58, or you don’t
choose to follow them. Instead, go to the instructions for
Section B.
12

For definitions of responsible group, specified
fraudulent arrangement, and qualified investor, see
Section 4 of Revenue Procedure 2009-20.

Line 41
Enter the amounts of cash or the basis of property that
you invested after you made the initial investment
(including amounts reinvested).

Line 42
Enter the total amounts of net income (for example,
interest and dividends minus expenses) from the specified
fraudulent arrangement that, consistent with information
received from that arrangement, you included in income
for federal tax purposes for all tax years before the
discovery year, including tax years for which a refund is
barred by the statute of limitations.
Discovery year. The discovery year is the tax year when
one of the following occurs.
• The indictment, information, or complaint described in
section 4.02(1) or (2) of Revenue Procedure 2009-20
(as modified by Revenue Procedure 2011-58) is filed.
• The complaint or similar document described in
section 4.02(3) of Revenue Procedure 2009-20 (as
modified by Revenue Procedure 2011-58) is filed, or
the death of the lead figure occurs, whichever is later.

Line 44
Enter the total amount of cash or property that you
withdrew from the investment arrangement in all years
(whether designated as income or principal).

Line 45
This is the amount of your investment that is eligible for a
deduction before any actual or potential recoveries are
taken into account.
Instructions for Form 4684 (2025)

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Include in the total any amounts from the additional sheet
you attached because you had more than two casualties
or thefts.

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Line 46

Part I—Election Statement

Potential third-party recovery. This is the amount of all
actual or potential claims for recovery, as of the last day of
the discovery year (defined earlier), that are not from
potential insurance or Securities Investor Protection
Corporation (SIPC) recovery, or a potential direct recovery.

Fill out Part I if you want to make an election to deduct a
loss attributable to a federally declared disaster and that
occurred in a federally declared disaster area in the tax
year immediately preceding the tax year the loss was
sustained. By making this election, you agree not to
deduct the loss for the disaster year.

Potential insurance/SIPC recovery. This is the total of
all actual or potential claims for reimbursement that, as of
the last day of the discovery year, are attributable to:
• Insurance policies in your name that protect you from
this type of loss;
• Contractual arrangements, other than insurance, that
guaranteed or otherwise protected against this type of
loss; or
• Amounts payable from SIPC, as advances for
customer claims under the Securities Investor
Protection Act of 1970, or by a similar entity under a
similar provision.

Line 48
Enter the amounts you actually received as a
reimbursement or recovery from any source. Don’t include
amounts that are potential direct recoveries (defined
earlier) or potential third-party recoveries (defined earlier).

Line 49
Enter the amount of potential insurance/SIPC recovery
(defined earlier).

Line 51
Enter the amount from line 51 on line 28 of Section B.
Don’t complete lines 19 through 27 for this loss. Then
complete Section B, Part II.
Tip: If you had other casualties or thefts, fill out a
separate Section B, Part I, for them.

Part II
Read the statements and declarations in this part
carefully. Enter the required information in the spaces
provided. You are agreeing to these statements and
declarations when you sign your tax return. The
information you enter in this part will be used to verify the
fraudulent investment arrangement.

Section D—Election To Deduct Federally
Declared Disaster Loss in Preceding Tax Year

Read the discussion under Disaster Losses, earlier. Then
fill out Section D if you want to elect to deduct a disaster
loss on your tax return for the preceding year. You may
also fill out Section D if you want to revoke a previous
election to deduct a disaster loss in the tax year
immediately preceding the disaster year.
Instructions for Form 4684 (2025)

You must make this election on or before the date that
is 6 months after the regular due date for filing your
original return (without extensions) for the disaster year.

Part II—Revocation of Prior Election
Fill out Part II if you want to revoke a prior election to
deduct a loss attributable to a federally declared disaster
and that occurred in a federally declared disaster area in
the tax year immediately preceding the tax year the loss
was sustained.
Attach Section D to your amended return for the tax
year immediately preceding the tax year the loss was
sustained to revoke the previous disaster loss deduction.
You must file this amended return for the preceding year
on or before the date you file the original return or
amended return for the disaster year on which you claim
the disaster loss.
You can revoke the prior election on or before the date
that is 90 days after the due date for making the election.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the
right amount of tax.
You aren’t required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number.
Books or records relating to a form or its instructions must
be retained as long as their contents may become
material in the administration of any Internal Revenue law.
Generally, tax returns and return information are
confidential, as required by section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual taxpayers filing this form is approved
under OMB control number 1545-0074 and is included in
the estimates shown in the instructions for their individual
income tax return. The estimated burden for all other
taxpayers who file this form is shown below.

13

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DRAFT

Potential direct recovery. This is the amount of all
actual or potential claims for recovery, as of the last day of
the discovery year (defined earlier), against the
responsible individual or group.

Attach Section D to your original return or amended
return for the tax year immediately preceding the tax year
the loss was sustained to claim the disaster loss
deduction.

TREASURY/IRS AND OMB USE ONLY DRAFT
Recordkeeping

. . . . . . . . . . . . .

Learning about the law or the
form . . . . . . . . . . . . . . . . . . . . .
Preparing the form

2 hr., 37 min.

.

24 min.

. . . . . . . . . .

1 hr., 58 min.

. .

1 hr., 3 min.

DRAFT

DRAFT

Copying, assembling, and
sending the form to the IRS .

If you have comments concerning the accuracy of
these time estimates or suggestions for making this form
simpler, we would be happy to hear from you. See the
instructions for the tax return with which this form is filed.

14

Instructions for Form 4684 (2025)

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Index

A

Amended return 1, 6

C

Corrosive drywall 6
Deductible losses:
Casualty losses 3
Theft losses 3
When to deduct 4
Deposit losses 6
Disaster area losses 4
East Palestine disaster relief
payments 6
Home damaged or destroyed 5
Home made unsafe 4
How to deduct loss in preceding
year 4

F

Federal casualty loss 2
Federally declared disaster:
Disaster loss 2
Federal casualty loss 2
Qualified disaster loss 2
Financial scams 10

G

N

Nondeductible losses 3

P

Personal-use property 1, 3
Ponzi-type investment
schemes 10
Postponed tax deadlines 1

Q

Gain on reimbursement 3

Qualified disaster loss 2
Qualified opportunity funds 2

L

R

Losses:
Casualty losses 3
Theft losses 3
When to deduct 4

Reimbursement 7
Related expenses 3

DRAFT

DRAFT

D

Wildfire relief payments 6
Disaster loss 2

15