Future Developments . . . . . . . . . . . . . . . . . . . . . . . 1

Contents

Future Developments . . . . . . . . . . . . . . . . . . . . . . . 1

Publication 547

What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Casualties,

Disasters, and

Thefts

Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

For use in preparing

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Loss on Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Proof of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Figuring a Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2025 Returns

Deduction Limits . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figuring a Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

When To Report Gains and Losses . . . . . . . . . . . 23

Disaster Area Losses . . . . . . . . . . . . . . . . . . . . . . 23

How To Report Gains and Losses . . . . . . . . . . . . 28

How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . . 29

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Future Developments

For the latest information about developments related to

Pub. 547, such as legislation enacted after it was

published, go to IRS.gov/Pub547.

What’s New

Get forms and other information faster and easier at:

• IRS.gov (English)

• IRS.gov/Spanish (Español)

• IRS.gov/Chinese (中文)

Feb 2, 2026

• IRS.gov/Korean (한국어)

• IRS.gov/Russian (Pусский)

• IRS.gov/Vietnamese (Tiếng Việt)

Disaster-related postponement treated as a filing extension. The Disaster Related Extension of Deadlines

Act, enacted December 26, 2025, provides that disaster-related postponements of filing deadlines are treated

as extensions of the deadlines for purposes of calculating

the lookback period used to determine the eligibility of a

claim for credit or refund. This extension applies to claims

filed after December 26, 2025. For more information, see

the Instructions for Form 1040-X.

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 IRA 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 Postponed Tax Deadlines, later.

Publication 547 (2025) Catalog Number 15090K

Department of the Treasury Internal Revenue Service www.irs.gov

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 loss,

later.

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, later.

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 return, 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.

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. See How to report the loss on Form

1040-X, later.

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 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.

2

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

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 Deduction Limits, 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, go to Opportunity Zones Frequently

Asked Questions on IRS.gov.

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 the Instructions for Form 8949 for information

on how to make the election. You will need to attach Form

8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, annually until you dispose

of the QOF investment. See the Form 8997 instructions for

more information.

QOF investment. If you held a qualified investment in a

QOF at any time during the year, you must file your return

with Form 8997 attached. See the Form 8997 instructions.

Photographs of missing children. The IRS is a proud

partner with the National Center for Missing & Exploited

Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring

these children home by looking at the photographs and

calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Publication 547 (2025)

Introduction

This publication explains the tax treatment of casualties,

thefts, and losses on deposits. A casualty occurs when

your property is damaged as a result of a disaster such as

a storm, fire, car accident, or similar event. A theft occurs

when someone steals your property. A loss on deposits

occurs when your financial institution becomes insolvent

or bankrupt.

This publication discusses the following topics.

• Definitions of a casualty, theft, and loss on deposits.

• How to figure the amount of your gain or loss.

• How to treat insurance and other reimbursements you

receive.

• The deduction limits.

• When and how to report a casualty or theft.

• The special rules for disaster area losses.

Forms to file. Generally, when you have a casualty or

theft, you have to file Form 4684. You may also have to file

one or more of the following forms.

• Schedule A (Form 1040).

• Schedule A (Form 1040-NR) (for nonresident aliens).

• Schedule D (Form 1040).

• Form 4797.

For details on which form to use, see How To Report

Gains and Losses, later.

Getting answers to your tax questions. If you have

a tax question not answered by this publication or the How

To Get Tax Help section at the end of this publication, go

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search

feature or viewing the categories listed.

Getting tax forms, instructions, and publications.

Go to IRS.gov/Forms to download current and prior-year

forms, instructions, and publications.

Ordering tax forms, instructions, and publications.

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order

prior-year forms and instructions. The IRS will process

your order for forms and publications as soon as possible.

Don’t resubmit requests you’ve already sent us. You can

get forms and publications faster online.

Useful Items

You may want to see:

Publication

523 Selling Your Home

523

525 Taxable and Nontaxable Income

525

544 Sales and Other Dispositions of Assets

544

550 Investment Income and Expenses

550

551 Basis of Assets

551

584 Casualty, Disaster, and Theft Loss Workbook

(Personal-Use Property)

584

584-B Business Casualty, Disaster, and Theft Loss

Workbook

584-B

Condemnations. For information on condemnations of

property, see Involuntary Conversions in chapter 1 of Pub.

544, Sales and Other Dispositions of Assets.

Workbooks for casualties and thefts. Pub. 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use

Property), is available to help you make a list of your stolen or damaged personal-use property and figure your

loss. It includes schedules to help you figure the loss on

your home, its contents, and your motor vehicles.

Pub. 584-B, Business Casualty, Disaster, and Theft

Loss Workbook, is available to help you make a list of your

stolen or damaged business or income-producing property and figure your loss.

Comments and suggestions. We welcome your comments about this publication and suggestions for future

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue

Service, Tax Forms and Publications, 1111 Constitution

Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will

consider your comments and suggestions as we revise

our tax forms, instructions, and publications. Don’t send

tax questions, tax returns, or payments to the above address.

Publication 547 (2025)

Form (and Instructions)

Schedule A (Form 1040) Itemized Deductions

Schedule A (Form 1040)

Schedule A (Form 1040-NR) Itemized Deductions

(for nonresident aliens)

Schedule A (Form 1040-NR)

Schedule D (Form 1040) Capital Gains and Losses

Schedule D (Form 1040)

172 Net Operating Losses (NOLs) for Individuals,

Estates, and Trusts

172

4684 Casualties and Thefts

4684

4797 Sales of Business Property

4797

See How To Get Tax Help near the end of this publication

for information about getting publications and forms.

Casualty

A casualty is the damage, destruction, or loss of property

resulting from an identifiable event that is sudden, unexpected, or unusual.

• A sudden event is one that is swift, not gradual or progressive.

• An unexpected event is one that is ordinarily unanticipated and unintended.

3

• An unusual event is one that isn’t a day-to-day occur-

rence and that isn’t typical of the activity in which you

were engaged.

Casualty losses not compensated for by insurance are

deductible during the tax year that the loss is sustained.

This is generally the tax year that the loss occurred. However, a casualty loss may be sustained in a year after the

casualty occurred. See When To Report Gains and Losses and Table 3, later.

Definitions. Three specific types of casualty losses are

described in this publication.

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 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 wasn’t attributable to a federally declared disaster, it

isn’t 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 Deductible

losses, 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 aren’t 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

Area Losses, later.

Qualified disaster loss. A qualified disaster loss includes an individual’s casualty and 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;

4

• 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.

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).

Go to IRS.gov/DisasterTaxRelief for date-specific declarations associated with these disasters and for more information.

Deductible losses. For tax years beginning after 2017, if

you are an individual, casualty losses of personal-use

property are deductible only if the loss is attributable to a

federally declared disaster (federal casualty loss). Personal-use property is other than business property or income-producing property. If the event causing you to suffer a personal casualty loss (not attributed to a federally

declared disaster) occurred before January 1, 2018, but

the casualty loss wasn’t sustained until January 1, 2018,

or later, the casualty loss isn’t deductible. See When To

Report Gains and Losses, later, for more information on

when a casualty loss is sustained.

Example. As a result of a storm, a tree fell on your

house in December 2023, and you suffered $5,000 in

damage. The President didn’t declare the storm a federally declared disaster. You filed a claim with your insurance company and reasonably expected the entire

amount of the claim to be covered by your insurance company. In January 2025, your insurance company paid you

$3,000 and determined it didn’t owe you the remaining

$2,000 from your claim. The $2,000 personal casualty

loss is sustained in 2025 even though the storm occurred

in 2023. Because the $2,000 isn’t a federal casualty loss,

it isn’t deductible as a casualty loss under the current limitations.

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. In this case, you may deduct personal casualty losses that aren’t attributable to a federally declared disaster

to the extent they don’t exceed your personal casualty

gains.

Publication 547 (2025)

Casualty losses can result from a number of different

causes, including the following.

and drapes caused by the bursting of a water heater

does qualify as a casualty.

• Car accidents (but see Nondeductible losses next for

• Most losses of property caused by droughts. To be de-

exceptions).

• Earthquakes.

• Fires (but see Nondeductible losses next for exceptions).

• Floods.

• Government-ordered demolition or relocation of a

home that is unsafe to use because of a disaster as

discussed under Disaster Area Losses, later.

• Mine cave-ins.

• Shipwrecks.

• Sonic booms.

• Storms, including hurricanes and tornadoes.

• Terrorist attacks.

• Vandalism.

• Volcanic eruptions.

Nondeductible losses. A casualty loss isn’t deductible,

even to the extent the loss doesn’t exceed your personal

casualty gains, if the damage or destruction is caused by

the following.

• Accidentally breaking articles such as glassware or

china under normal conditions.

• A family pet (explained below).

• A fire if you willfully set it or pay someone else to set it.

• A car accident if your willful negligence or willful act

caused it. The same is true if the willful act or willful

negligence of someone acting for you caused the accident.

• Progressive deterioration (explained below). However,

see Special Procedure for Damage From Corrosive

Drywall, later.

Family pet. Loss of property due to damage by a family pet isn’t deductible as a casualty loss unless the requirements discussed earlier under Casualty are met.

Example. Your antique oriental rug was damaged by

your new puppy before it was housebroken. Because the

damage wasn’t unexpected and unusual, the loss isn’t deductible as a casualty loss.

Progressive deterioration. Loss of property due to

progressive deterioration isn’t deductible as a casualty

loss. This is because the damage results from a steadily

operating cause or a normal process rather than from a

sudden event. The following are examples of damage due

to progressive deterioration.

• The steady weakening of a building due to normal

wind and weather conditions.

• The deterioration and damage to a water heater that

bursts. However, the rust and water damage to rugs

Publication 547 (2025)

ductible, a drought-related loss must generally be incurred in a trade or business or in a transaction entered into for profit.

• Termite or moth damage.

• The damage or destruction of trees, shrubs, or other

plants by a fungus, disease, insects, worms, or similar

pests. However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss.

Special Procedure for Damage From

Corrosive Drywall

Caution: Because the personal casualty losses

claimed under this special procedure aren’t attributable to

a federally declared disaster, they’re only deductible to the

extent such losses don’t exceed your personal casualty

gains.

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 can deduct the

amounts you paid to repair damage to your home and

household appliances due to corrosive drywall. Under this

procedure, you treat the amounts paid for repairs as a

casualty loss in the year of payment. For example,

amounts you paid for repairs in 2025 are deductible on

your 2025 tax return and amounts you paid for repairs in

2024 are deductible on your 2024 tax return.

Note: If you paid for any repairs before 2025 and you

choose to follow this special procedure, you can amend

your return for the earlier year by filing Form 1040-X,

Amended U.S. Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. Form

4684 for the appropriate year can be found at IRS.gov.

Generally, Form 1040-X must be filed within 3 years after

the date the original return was filed or within 2 years after

the date the tax was paid, whichever is later.

Corrosive drywall. For purposes of this special procedure, “corrosive drywall” means drywall that is identified

as problem drywall under the two-step identification

method published by the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) in their interim guidance dated

January 28, 2010, as revised by the CPSC and HUD. The

revised identification guidance and remediation guidelines

are available at CPSC.gov/en/Safety-Education/SafetyEducation-Centers/Drywall-Information-Center.

Special instructions for completing Form 4684. If you

choose to follow this special procedure, complete Form

4684, Section A, according to the instructions below. The

IRS won’t challenge your treatment of damage resulting

from corrosive drywall as a casualty loss if you determine

and report the loss as explained below.

5

Top margin of Form 4684. Enter “Revenue Procedure 2010-36.”

Line 1. Enter the information required by the line 1 instructions.

Line 2. Skip this line.

Line 3. Enter the amount of insurance or other reimbursements you received (including through litigation). If

none, enter -0-.

Lines 4–7. Skip these lines.

Line 8. Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. Enter only the amounts you paid to restore

your home to the condition existing immediately before the

damage. Don’t enter any amounts you paid for improvements or additions that increased the value of your home

above its pre-loss value. If you replaced a household appliance instead of repairing it, enter the lesser of:

• The current cost to replace the original appliance, or

• The basis of the original appliance (generally its cost).

Line 9. If line 8 is more than line 3, do one of the following.

1. If you have a pending claim for reimbursement (or you

intend to pursue reimbursement), enter 75% of the

difference between lines 3 and 8.

2. If item (1) doesn’t apply to you, enter the full amount

of the difference between lines 3 and 8.

If line 8 is less than or equal to line 3, you can’t claim a

casualty loss deduction using this special procedure.

Caution: If you have a pending claim for reimbursement (or you intend to pursue reimbursement), you may

have income or an additional deduction in a later tax year

depending on the actual amount of reimbursement received. See Reimbursement Received After Deducting

Loss, later.

Lines 10–18. Complete these lines according to the

Instructions for Form 4684.

Choosing not to follow this special procedure. If you

choose not to follow this special procedure, you are subject to all of the provisions that apply to the deductibility of

casualty losses, and you must complete lines 1–9 according to the Instructions for Form 4684. This means, for example, that you must establish that the damage, destruction, or loss of property resulted from an identifiable event

as defined earlier under Casualty. Furthermore, you must

have proof that shows the following.

• The loss is properly deductible in the tax year you

claimed it and not in some other year. See When To

Report Gains and Losses, later.

• The amount of the claimed loss. See Proof of Loss,

later.

6

• No claim for reimbursement of any portion of the loss

exists for which there is a reasonable prospect of recovery. See When To Report Gains and Losses, later.

Theft

A theft is the taking and removing of money or property

with the intent to deprive the owner of it. The taking of

property must be illegal under the law of the state where it

occurred and it must have been done with criminal intent.

You don’t need to show a conviction for theft.

Theft includes the taking of money or property by the

following means.

• Blackmail.

• Burglary.

• Embezzlement.

• Extortion.

• Kidnapping for ransom.

• Larceny.

• Robbery.

The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law.

Theft loss deduction limited. For tax years beginning

after 2017, if you are an individual, casualty and theft losses of personal-use property are deductible only if the losses are attributable to a federally declared disaster (federal casualty loss).

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. In this case, you may deduct personal casualty losses that aren’t attributable to a federally declared disaster

to the extent they don’t exceed your personal casualty

gains.

Example. Martin and Grace experienced multiple personal casualties in 2025. Grace’s diamond necklace was

stolen, resulting in a $15,500 casualty loss. Martin and

Grace also lost their camper as a result of a lightning

strike. They have replacement-value insurance on the

camper, so they have a $13,000 gain. Finally, they lost

their car in a flood determined to be a federally declared

disaster, resulting in a casualty loss of $25,000. Because

Martin and Grace experienced a $13,000 personal casualty gain as a result of the replacement-value insurance,

they can offset that gain with a portion of their loss attributable to the stolen necklace and claim the full federal casualty loss of $25,000 subject to the $100 and 10% of AGI

reductions.

Decline in market value of stock. You can’t deduct as a

theft loss the decline in market value of stock acquired on

the open market for investment if the decline is caused by

disclosure of accounting fraud or other illegal misconduct

by the officers or directors of the corporation that issued

Publication 547 (2025)

the stock. However, you may be able to deduct it as a capital loss on Schedule D (Form 1040) if the stock is sold or

exchanged or becomes completely worthless. For more

information about stock sales, worthless stock, and capital

losses, see chapter 4 of Pub. 550.

Mislaid or lost property. The simple disappearance of

money or property isn’t a theft. However, an accidental

loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden,

unexpected, or unusual. Sudden, unexpected, and unusual events were defined earlier under Casualty.

Example. A car door is accidentally slammed on your

hand, breaking the setting of your diamond ring. The diamond falls from the ring and is never found. The loss of

the diamond is a casualty.

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 you choose

to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on

Section B, line 28. Skip lines 19 through 27, but you must

fill out Section B, lines 29 through 39, as appropriate. Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. You don’t need to complete Appendix A.

For more information, see the above revenue ruling and

revenue procedures and the Instructions for Form 4684.

If you choose not to use the procedures in Revenue

Procedure 2009-20, as modified by Revenue Procedure

2011-58, you may claim your theft loss by filling out Section B, lines 19 through 39, as appropriate.

Losses from financial scams. 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

income-producing property, such as losses from

Ponzi-type investment schemes, or financial scams.

Loss on Deposits

A loss on deposits can occur when a bank, credit union, or

other financial institution becomes insolvent or bankrupt. If

you incurred this type of loss, you can choose one of the

following ways to deduct the loss.

• As a casualty loss (to the extent the loss doesn’t exceed your personal casualty gains).

• As a nonbusiness bad debt.

Caution: You can no longer claim any miscellaneous

itemized deductions, including the deduction for an ordinary loss on deposits in insolvent or bankrupt financial institutions.

Casualty loss. You can choose to deduct a loss on deposits as a casualty loss for any year in which you can reasonably estimate how much of your deposits you have lost

in an insolvent or bankrupt financial institution. The choice

is generally made on the return you file for that year and

applies to all your losses on deposits for the year in that

particular financial institution. If you treat the loss as a

casualty loss, you can’t treat the same amount of the loss

as a nonbusiness bad debt when it actually becomes

worthless. However, you can take a nonbusiness bad debt

deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary

loss. Once you make the choice, you can’t change it without permission from the IRS.

Casualty loss limitation. If you are an individual,

casualty losses of personal-use property are deductible

only if the loss is attributable to a federally declared disaster. 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. Because

a loss on deposits isn’t attributable to a federally declared

disaster, you may deduct losses on deposits as personal

casualty losses only to the extent they don’t exceed your

personal casualty gains.

Nonbusiness bad debt. If you don’t choose to claim the

loss as a casualty loss for purposes of offsetting gains,

you must wait until the year the actual loss is determined

and deduct the loss as a nonbusiness bad debt in that

year.

How to report. The kind of deduction you choose for

your loss on deposits determines how you report your

loss. See Table 1.

profit.

If you were the victim of a financial scam, review advice

memorandum number 202511015 for additional guidance.

Note: The personal-use property limitation for tax

years beginning after 2017 does not apply to losses on

Publication 547 (2025)

7

Table 1. Reporting Loss on Deposits

IF you choose to report the loss

as a...

THEN report it on...

casualty loss (see Casualty loss

limitation under Loss on Deposits)

Form 4684 and Schedule A

(Form 1040).

nonbusiness bad debt

Form 8949 and Schedule D

(Form 1040).

More information. For more information, see Deposit in

Insolvent or Bankrupt Financial Institution in Pub. 550.

Deducted loss recovered. If you recover an amount you

deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of

recovery. If any part of the original deduction didn’t reduce

your tax in the earlier year, you don’t have to include that

part of the recovery in your income. For more information,

see Recoveries in Pub. 525.

Proof of Loss

To deduct a casualty or theft loss, you must be able to

show that there was a casualty or theft. You must also be

able to support the amount you take as a deduction.

Casualty loss proof. For a casualty loss, you should be

able to show all of the following.

• That you were the owner of the property or, if you

leased the property from someone else, that you were

contractually liable to the owner for the damage.

• The type of casualty (car accident, fire, storm, etc.)

and when it occurred.

• That the loss was a direct result of the casualty.

• Whether a claim for reimbursement exists for which

there is a reasonable expectation of recovery.

Theft loss proof. For a theft loss, you should be able to

show all of the following.

• That you were the owner of the property.

• That your property was stolen.

• When you discovered your property was missing.

• Whether a claim for reimbursement exists for which

there is a reasonable expectation of recovery.

Note: It is important that you have records that will

prove your deduction. If you don’t have the actual records

to support your deduction, you can use other satisfactory

evidence to support it.

Figuring a Loss

To determine your deduction for a casualty or theft loss,

you must first figure your loss.

8

Amount of loss. Figure the amount of your loss using

the following steps.

1. Determine your adjusted basis in the property before

the casualty or theft.

2. Determine the decrease in fair market value (FMV) of

the property as a result of the casualty or theft.

3. From the smaller of the amounts you determined in

(1) and (2), subtract any insurance or other reimbursement you received or expect to receive.

For personal-use property, apply the deduction limits, discussed later, to determine the amount of your deductible

loss.

Gain from reimbursement. If your reimbursement is

more than your adjusted basis in the property, you have a

gain. This is true even if the decrease in the FMV of the

property is smaller than your adjusted basis. If you have a

gain, you may have to pay tax on it, or you may be able to

postpone reporting the gain. See Figuring a Gain, later.

Business or income-producing property. If you

have business or income-producing property, such as

rental property, and it is stolen or completely destroyed,

the decrease in FMV isn’t considered. Your loss is figured

as follows:

Your adjusted basis in the property

MINUS

Any salvage value

MINUS

Any insurance or other reimbursement you receive or expect to

receive

Loss of inventory. There are two ways you can deduct a casualty or theft loss of inventory, including items

you hold for sale to customers.

One way is to deduct the loss through the increase in

the cost of goods sold by properly reporting your opening

and closing inventories. Don’t claim this loss again as a

casualty or theft loss. If you take the loss through the increase in the cost of goods sold, include any insurance or

other reimbursement you receive for the loss in gross income.

The other way is to deduct the loss separately. If you

deduct it separately, eliminate the affected inventory items

from the cost of goods sold by making a downward adjustment to opening inventory or purchases. Reduce the loss

by the reimbursement you received. Don’t include the reimbursement in gross income. If you don’t receive the reimbursement by the end of the year, you may not claim a

loss to the extent you have a reasonable prospect of recovery.

Leased property. If you are liable for casualty damage

to property you lease, your loss is the amount you must

pay to repair the property minus any insurance or other reimbursement you receive or expect to receive.

Separate computations. Generally, if a single casualty

or theft involves more than one item of property, you must

Publication 547 (2025)

figure the loss on each item separately. Then combine the

losses to determine the total loss from that casualty or

theft.

Exception for personal-use real property. In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, ornamental trees, and shrubs) is treated as one item.

Figure the loss using the smaller of the following.

• The decrease in FMV of the entire property.

• The adjusted basis of the entire property.

See Real property under Figuring the Deduction, later.

Decrease in FMV

FMV is the price for which you could sell your property to a

willing buyer when neither of you has to sell or buy and

both of you know all the relevant facts.

The decrease in FMV used to figure the amount of a

casualty or theft loss is the difference between the property’s FMV immediately before and immediately after the

casualty or theft.

FMV of stolen property. The FMV of property immediately after a theft is considered to be zero because you no

longer have the property.

Example. Several years ago, you purchased silver dollars at face value for $150. This is your adjusted basis in

the property. Your silver dollars were stolen this year. The

FMV of the coins was $1,000 just before they were stolen,

and insurance didn’t cover them. Your theft loss is $150.

Recovered stolen property. Recovered stolen property

is your property that was stolen and later returned to you.

If you recovered property after you had already taken a

theft loss deduction, you must refigure your loss using the

smaller of the property’s adjusted basis (explained later)

or the decrease in FMV from the time just before it was

stolen until the time it was recovered. Use this amount to

refigure your total loss for the year in which the loss was

deducted.

If your refigured loss is less than the loss you deducted,

you generally have to report the difference as income in

the recovery year. But report the difference only up to the

amount of the loss that reduced your tax. For more information on the amount to report, see Recoveries in Pub.

525.

Figuring Decrease in FMV—Items To

Consider

To figure the decrease in FMV because of a casualty or

theft, you generally need a competent appraisal. However,

other measures can also be used to establish certain decreases. See Appraisal, Cost of cleaning up or making repairs, and Special Procedure—Safe Harbor Methods for

Determining Casualty and Theft Losses below.

Appraisal. An appraisal to determine the difference between the FMV of the property immediately before a casuPublication 547 (2025)

alty or theft and immediately afterward should be made by

a competent appraiser. The appraiser must recognize the

effects of any general market decline that may occur along

with the casualty. This information is needed to limit any

deduction to the actual loss resulting from damage to the

property.

Several factors are important in evaluating the accuracy

of an appraisal, including the following.

• The appraiser’s familiarity with your property before

and after the casualty or theft.

• The appraiser’s knowledge of sales of comparable

property in the area.

• The appraiser’s knowledge of conditions in the area of

the casualty.

• The appraiser’s method of appraisal.

Tip: You may be able to use an appraisal that you used

to get a federal loan (or a federal loan guarantee) as the

result of a federally declared disaster to establish the

amount of your disaster loss. For more information on disasters, see Disaster Area Losses, later.

Cost of cleaning up or making repairs. The cost of repairing damaged property isn’t part of a casualty loss. Neither is the cost of cleaning up after a casualty. But you can

use the cost of cleaning up or of making repairs after a

casualty as a measure of the decrease in FMV if you meet

all the following conditions.

• The repairs are actually made.

• The repairs are necessary to bring the property back

to its condition before the casualty.

• The amount spent for repairs isn’t excessive.

• The repairs take care of the damage only.

• The value of the property after the repairs isn’t, due to

the repairs, more than the value of the property before

the casualty.

Landscaping. The cost of restoring landscaping to its

original condition after a casualty may indicate the decrease in FMV. You may be able to measure your loss by

what you spend on the following.

• Removing destroyed or damaged trees and shrubs,

minus any salvage you receive.

• Pruning and other measures taken to preserve damaged trees and shrubs.

• Replanting necessary to restore the property to its approximate value before the casualty.

Car value. Books issued by various automobile organizations that list the manufacturer and the model of your car

may be useful in figuring the value of your car. You can use

the retail value for your car listed in the book and modify it

by such factors as mileage and the condition of your car to

determine its value. The prices aren’t official, but they may

be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your

area. If your car isn’t listed in the books, determine its

value from other sources. A dealer’s offer for your car as a

9

trade-in on a new car isn’t usually a measure of its true

value.

Special Procedure—Safe Harbor Methods

for Determining Casualty and Theft Losses

To figure the amount of your casualty and theft losses, you

must generally determine the actual reduction in the FMV

of lost or damaged property using a competent appraisal

or the cost of repairs you actually make. But the special

safe harbor methods in Revenue Procedure 2018-08,

2018-2 I.R.B. 286, allow you to determine the decrease in

FMV in other ways.

Caution: If you are an individual, casualty losses of

personal-use property are deductible only if the loss is attributable to a federally declared disaster. An exception to

the rule limiting the deduction for personal casualty and

theft losses applies if you have personal casualty gains. In

this case, you may deduct personal casualty losses that

aren’t attributable to a federally declared disaster to the

extent they don’t exceed your personal casualty gains.

Special procedure for determining casualty and theft

losses generally. Revenue Procedure 2018-08, 2018-2

I.R.B.

286,

available

at

IRS.gov/irb/

2018-02_IRB#RP-2018-08, provides safe harbor methods

that you may use to figure the amount of your casualty and

theft losses of your personal-use residential real property

and personal belongings. If you qualify for and use a safe

harbor method described in Revenue Procedure 2018-08,

the IRS won’t challenge your determination. The use of a

safe harbor method described in Revenue Procedure

2018-08 isn’t mandatory.

Personal-use residential real property safe harbor

methods. Personal-use residential real property is generally real property, including improvements, that is owned

by the individual who suffered a casualty loss and that

contains at least one personal residence. It doesn’t include a personal residence if any part of the personal residence is used as rental property or contains a home office

used in a trade or business or transaction entered into for

profit. For more details, see Revenue Procedure 2018-08.

The safe harbor methods for personal-use residential

real property available through Revenue Procedure

2018-08 are the following.

• Estimated repair cost method.

• De minimis method.

• Insurance method.

• Federally declared disaster method—contractor safe

harbor.

• Federally declared disaster method—disaster loan appraisal.

Estimated repair cost method. The estimated repair

cost safe harbor method allows you to figure the decrease

in the FMV of your personal-use residential real property

using the lesser of two repair estimates prepared by separate and independent licensed contractors. The estimates

10

must detail the itemized costs to restore your property to

its condition immediately before the casualty. The estimated repair cost safe harbor method is limited to casualty

losses of $20,000 or less.

De minimis method. The de minimis safe harbor

method allows you to figure the decrease in the FMV of

your personal-use residential real property based on a

written good-faith estimate of the cost of repairs required

to restore your property to its condition immediately before

the casualty. You must keep documentation showing how

you estimated the amount of your loss. The de minimis

safe harbor method is available for casualty losses of

$5,000 or less.

Insurance method. The insurance safe harbor

method allows you to figure the decrease in the FMV of

your personal-use residential real property based upon

the estimated loss in reports prepared by your homeowners or flood insurance company. These reports must set

forth the estimated loss you sustained from the damage to

or the destruction of your property.

Federally declared disaster method—contractor

safe harbor. If the loss occurred in a disaster area and

was due to a federally declared disaster, then you may

use the contractor safe harbor method or the disaster loan

appraisal method. Under the contractor safe harbor

method, you may use the contract price for the repairs

specified in a contract prepared by an independent and licensed contractor to determine the decrease in the FMV

of your personal-use residential real property. This safe

harbor method doesn’t apply unless you are subject to a

binding contract signed by you and the contractor setting

forth the itemized costs to restore your personal-use residential real property to its condition immediately before

the casualty.

Federally declared disaster method—disaster loan

appraisal. Under the disaster loan appraisal safe harbor

method, you may use an appraisal prepared to obtain a

loan of federal funds or a loan guarantee from the federal

government that identifies your estimated loss from a federally declared disaster to determine the decrease in the

FMV of your personal-use residential real property.

Personal belongings safe harbor methods. Personal

belongings generally include items of tangible personal

property owned by an individual who suffered a casualty

or theft loss if they aren’t used in a trade or business. Personal belongings don’t include an item that maintains or

increases its value over time or certain other types of

property. For more details, see Revenue Procedure

2018-08. The safe harbor methods for personal belongings are the de minimis method and the replacement cost

safe harbor method for federally declared disasters.

De minimis method. Under the de minimis method,

you can make a good-faith estimate of the decrease in the

FMV of your personal belongings. You must maintain records describing your affected personal belongings as

well as your methodology for estimating your loss. This

method is limited to losses of $5,000 or less.

Publication 547 (2025)

Replacement cost safe harbor method for federally

declared disasters. The replacement cost safe harbor

method for federally declared disasters allows you to determine the FMV of your personal belongings located in a

disaster area immediately before a federally declared disaster to figure the amount of your casualty or theft loss. To

use the replacement cost safe harbor method, you must

first determine the current cost to replace your personal

belonging with a new one and then reduce that amount by

10% for each year you have owned the personal belonging. See the Personal Belongings Valuation Table in Revenue Procedure 2018-08. If you choose to use the replacement cost safe harbor method, then you must use that

method for all your personal belongings, with certain exceptions identified in Revenue Procedure 2018-08.

Each of these safe harbor methods is subject to additional rules and exceptions. For additional information, see

Revenue Procedure 2018-08.

expenditures you made with respect to qualified disaster

mitigation payments (discussed later under Disaster Area

Losses).

Related expenses. The incidental expenses due to a

casualty or theft, such as expenses for the treatment of

personal injuries, for temporary housing, or for a rental car,

aren’t part of your casualty or theft loss. However, they

may be deductible as business expenses if the damaged

or stolen property is business property.

Replacement cost. The cost of replacing stolen or destroyed property isn’t part of a casualty or theft loss.

Example. You bought a new chair 4 years ago for

$300. In April, a flood destroyed the chair. You estimate

that it would cost $500 to replace it. If you had sold the

chair before the flood, you estimate that you could have

received only $100 for it because it was 4 years old. The

chair wasn’t insured. Your loss is $100, the FMV of the

chair before the flood. It isn’t $500, the replacement cost.

Decreases to safe harbor loss amount. The loss determined through the safe harbor methods must be reduced by the value of any repairs provided by a third party

at no cost (for example, work done by volunteers or via

donations) to you. Additionally, reduce your loss by the

amount of any insurance, reimbursements, or other compensation received.

Sentimental value. Don’t consider sentimental value

when determining your loss. If a family portrait, heirloom,

or keepsake is damaged, destroyed, or stolen, you must

base your loss on its FMV, as limited by your adjusted basis in the property.

Reporting requirements on Form 4684. 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, don’t enter an amount on line 5 or

line 6 for each property. Instead, enter the decrease in the

FMV determined under the relevant safe harbor method

on line 7.

Decline in market value of property in or near casualty area. A decrease in the value of your property because it is in or near an area that suffered a casualty, or

that might again suffer a casualty, isn’t to be taken into

consideration. You have a loss only for actual casualty

damage to your property. However, if your home is in a

federally declared disaster area, see Disaster Area Losses, later.

Tip: For losses due to Hurricane Harvey, Hurricane

Irma, and Hurricane Maria, see Revenue Procedure

2018-09, 2018-2 I.R.B. 290, available at IRS.gov/irb/

2018-02_IRB#RP-2018-09, for the cost indexes safe harbor method.

Costs of photographs and appraisals. Photographs

taken after a casualty will be helpful in establishing the

condition and value of the property after it was damaged.

Photographs showing the condition of the property after it

was repaired, restored, or replaced may also be helpful.

Appraisals are used to figure the decrease in FMV because of a casualty or theft. See Appraisal, earlier, under

Figuring Decrease in FMV—Items To Consider for information about appraisals.

The costs of photographs and appraisals used as evidence of the value and condition of property damaged as

a result of a casualty aren’t a part of the loss. They are expenses in determining your tax liability. For tax years beginning after 2017, they cannot be deducted as miscellaneous itemized deductions.

Figuring Decrease in FMV—Items Not To

Consider

You generally shouldn’t consider the following items when

attempting to establish the decrease in FMV of your property.

Cost of protection. The cost of protecting your property

against a casualty or theft isn’t part of a casualty or theft

loss. The amount you spend on insurance or to board up

your house against a storm isn’t part of your loss. If the

property is business property, these expenses are deductible as business expenses.

If you make permanent improvements to your property

to protect it against a casualty or theft, add the cost of

these improvements to your basis in the property. An example would be the cost of a dike to prevent flooding.

Exception. You can’t increase your basis in the property by, or deduct as a business expense, any

Publication 547 (2025)

Adjusted Basis

The measure of your investment in the property you own is

its basis. For property you buy, your basis is usually its

cost to you. For property you acquire in some other way,

such as inheriting it, receiving it as a gift, or getting it in a

nontaxable exchange, you must figure your basis in another way, as explained in Pub. 551.

11

Inherited property and the Section 1022 Election. If

you inherited property from someone who died in 2010

and the executor of the decedent’s estate made a Section

1022 Election using Form 8939, Allocation of Increase in

Basis for Property Acquired From a Decedent, special

rules regarding the basis would apply.

An executor of an estate of a decedent who died in

2010 could elect to apply a modified carryover basis treatment to property acquired from the decedent.

For more detailed information about the Section 1022

Election, see Notice 2011-66, 2011-35 I.R.B. 184, available at IRS.gov/irb/2011-35_IRB#NOT-2011-66. For optional safe harbor guidance under section 1022, see Revenue Procedure 2011-41, 2011-35 I.R.B. 188, available at

IRS.gov/irb/2011-35_IRB#RP-2011-41.

Adjustments to basis. While you own the property, various events may take place that change your basis. Some

events, such as additions or permanent improvements to

the property, increase basis. Others, such as earlier casualty losses and depreciation deductions, decrease basis.

When you add the increases to the basis and subtract the

decreases from the basis, the result is your adjusted basis. See Pub. 551 for more information on figuring the basis of your property.

Insurance and Other

Reimbursements

If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. You don’t have a casualty or theft loss to the

extent you are reimbursed.

If in the year of the casualty there is a claim for reimbursement with a reasonable prospect of recovery, the

loss isn’t sustained until you know with reasonable certainty whether such reimbursement will be received. If you

expect to be reimbursed for part or all of your loss, you

must subtract the expected reimbursement when you figure your loss. You must reduce your loss even if you don’t

receive payment until a later tax year. See Reimbursement

Received After Deducting Loss, later.

Types of Reimbursements

The most common type of reimbursement is an insurance

payment for your stolen or damaged property. Other types

of reimbursements are discussed next. Also see the Instructions for Form 4684.

Employer’s emergency disaster fund. If you receive

money from your employer’s emergency disaster fund and

you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction,

you must take that money into consideration in computing

the casualty loss deduction. Take into consideration only

the amount you used to replace your destroyed or damaged property.

Example. Your home was extensively damaged by a

tornado. Your loss after reimbursement from your insurance company was $10,000. Your employer set up a disaster relief fund for its employees. Employees receiving

money from the fund had to use it to rehabilitate or replace

their damaged or destroyed property. You received $4,000

from the fund and spent the entire amount on repairs to

your home. In figuring your casualty loss, you must reduce

your unreimbursed loss ($10,000) by the $4,000 you received from your employer’s fund. Your casualty loss before applying the deduction limits (discussed later) is

$6,000.

Cash gifts. If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use

the money, you don’t reduce your casualty loss by these

excludable cash gifts. This applies even if you use the

money to pay for repairs to property damaged in the disaster.

Example. Your home was damaged by a hurricane.

Relatives and neighbors made cash gifts to you that were

excludable from your income. You used part of the cash

gifts to pay for repairs to your home. There were no limits

or restrictions on how you could use the cash gifts. It was

an excludable gift, so the money you received and used to

pay for repairs to your home doesn’t reduce your casualty

loss on the damaged home.

Failure to file a claim for reimbursement. If your property is covered by insurance, you should file a timely insurance claim for reimbursement of your loss. If you don’t file

an 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.

Insurance payments for living expenses. You don’t reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations.

The portion of the loss usually not covered by insurance (for example, a deductible) isn’t subject to this rule.

main home because of a casualty or threat of one.

Example. Your car insurance policy includes comprehensive coverage with a $1,000 deductible. Because your

insurance doesn’t cover the first $1,000 of damages resulting from a storm, the $1,000 is deductible (subject to

the $100 and 10% rules, discussed later). This is true,

even if you don’t file an insurance claim, because your insurance policy won’t reimburse you for the deductible.

12

• You lose the use of your main home because of a

casualty.

• Government authorities don’t allow you access to your

Inclusion in income. If these insurance payments are

more than the temporary increase in your living expenses,

you must include the excess in your income. Report this

amount on Schedule 1 (Form 1040), line 8z. However, if

the casualty occurs in a federally declared disaster area,

none of the insurance payments are taxable. See Qualified disaster relief payments, later, under Disaster Area

Losses.

Publication 547 (2025)

Table 2. Deduction Limit Rules for Personal-Use Property

$100 rule

10% rule

General Application

You must reduce each casualty or theft loss by

$100 when figuring your deduction. Apply this

rule to personal-use property after you have

figured the amount of your loss.1

You must reduce your total casualty or theft

loss attributable to a federally declared disaster

by 10% of your AGI. Apply this rule to

personal-use property after you reduce each

loss by $100 (the $100 rule).2

Single Event

Apply this rule only once, even if many pieces

of property are affected.

Apply this rule only once, even if many pieces

of property are affected.

More Than One Event

Apply to the loss from each event.

Apply to the total of all your losses from all

federally declared disasters.

More Than One Person—

With Loss From the Same Event

(other than a married couple filing jointly)

Apply separately to each person.

Apply separately to each person.

Married Couple—

With Loss From the

Same Event

Filing

Joint

Return

Apply as if you were one person.

Apply as if you were one person.

Filing

Separate

Return

Apply separately to each spouse.

Apply separately to each spouse.

Apply separately to each owner of jointly

owned property.

Apply separately to each owner of jointly

owned property.

More Than One Owner

(other than a married couple filing jointly)

1

Qualified disaster losses must be reduced by $500 when figuring your deduction. See Disaster Area Losses, later, for more information.

2

The 10% rule doesn’t apply to qualified disaster losses. See Disaster Area Losses, later, for more information.

A temporary increase in your living expenses is the difference between the actual living expenses you and your

family incurred during the period you couldn’t use your

home and your normal living expenses for that period. Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home.

Generally, these expenses include the amounts you pay

for the following.

• Renting suitable housing.

• Transportation.

• Food.

• Utilities.

• Miscellaneous services.

Normal living expenses consist of these same expenses

that you would have incurred but didn’t because of the

casualty or the threat of one.

Example. As a result of a hurricane, you vacated your

apartment for a month and moved to a motel. You normally pay $1,400 a month for rent. None was charged for

the month the apartment was vacated. Your motel rent for

this month was $3,000. You normally pay $500 a month for

food. Your food expenses for the month you lived in the

motel were $850. You received $2,200 from your insurance company to cover your living expenses. You determine the payment you must include in income as follows.

Publication 547 (2025)

1. Insurance payment for living expenses . . . . . . . . . . . . $2,200

2. Actual expenses during the month you are

unable to use your home because of the

hurricane . . . . . . . . . . . . . . . . . . . . . .

$3,850

3. Normal living expenses . . . . . . . . . . . . .

1,900

4. Temporary increase in living expenses: Subtract line 3

1,950

from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Amount of payment includible in income: Subtract line 4

$ 250

from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax year of inclusion. You include the taxable part of

the insurance payment in income for the year you regain

the use of your main home or, if later, for the year you receive the taxable part of the insurance payment.

Example. Your main home was destroyed by a tornado

in June 2023. You regained use of your home in November 2024. The insurance payments you received in 2023

and 2024 were $1,500 more than the temporary increase

in your living expenses during those years. You include

this amount in income on your 2024 Form 1040. If, in

2025, you receive further payments to cover the living expenses you had in 2023 and 2024, you must include those

payments in income on your 2025 Form 1040 or 1040-SR.

Disaster relief. Food, medical supplies, and other forms

of assistance you receive don’t reduce your casualty loss

unless they are replacements for lost or destroyed property.

Tip: Qualified disaster relief payments you receive for

expenses you incurred as a result of a federally declared

disaster aren’t taxable income to you. For more information, see Qualified disaster relief payments under Disaster

Area Losses, later.

13

Disaster unemployment assistance payments are unemployment benefits that are taxable.

Generally, disaster relief grants received under the Stafford Act aren’t included in your income. See Federal disaster relief grants, later, under Disaster Area Losses.

Loan proceeds. Don’t reduce your casualty loss by loan

proceeds you use to rehabilitate or replace property on

which you are claiming a casualty loss deduction. If you

have a federal loan that is canceled (forgiven), see Federal loan canceled, later, under Disaster Area Losses.

Reimbursement Received After Deducting

Loss

If you figured your casualty or theft loss using the amount

of your expected reimbursement, you may have to adjust

your tax return for the tax year in which you get your actual

reimbursement. This section explains the adjustment you

may have to make.

Caution: If you paid amounts to repair damage to a

personal residence with a deteriorating concrete foundation and claimed a deduction on an original or amended

federal income tax return and payments were made to you

(or on your behalf to contractors) by the Connecticut

Foundation Solutions Indemnity Company (CFSIC), you

must include some or part of the payments in your gross

income. See Announcement 2020-5, 2020-19 I.R.B. 796

(available at IRS.gov/irb/2020-19_IRB#ANN-2020-5).

Actual reimbursement less than expected. If you later

receive less reimbursement than you expected, include

that difference as a loss with your other losses (if any) on

your return for the year in which you can reasonably expect no more reimbursement.

Example. Your personal car had an FMV of $2,000

when it was destroyed in a collision with another car in

2024. The accident was due to the negligence of the other

driver. At the end of 2024, there was a reasonable prospect that the owner of the other car would reimburse you

in full. You didn’t have a deductible loss in 2024.

In January 2025, the court awards you a judgment of

$2,000. However, in July it becomes apparent that you will

be unable to collect any amount from the other driver. You

can deduct the loss in 2025 (to the extent it doesn’t exceed your 2025 personal casualty gains) that is figured by

applying the deduction limits (discussed later).

Actual reimbursement more than expected. If you

later receive a larger reimbursement amount than you expected, after you have claimed a deduction for the loss,

you may have to include the extra reimbursement amount

in your income for the year you receive it. However, if any

part of the original deduction didn’t reduce your tax for the

earlier year, don’t include that part of the reimbursement

amount in your income. You don’t refigure your tax for the

year you claimed the deduction. See Recoveries in Pub.

525 to find out how much extra reimbursement to include

in income.

14

Example. In 2024, a hurricane that was a federally declared disaster destroyed your motorboat. Your loss was

$3,000, and you estimated that your insurance would

cover $2,500 of it. You didn't itemize deductions on your

2024 return nor did you increase your standard deduction

by the amount of your loss. When the insurance company

reimburses you for the loss, you don’t report any of the reimbursement as income. This is true even if it is for the full

$3,000 because you didn’t deduct the loss on your 2024

return. The loss didn’t reduce your tax.

Note: If the total of all the reimbursements you receive

is more than your adjusted basis in the destroyed or stolen

property, you will have a gain on the casualty or theft. If

you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to

include the gain in your income for the later year. Include

the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. You may

be able to postpone reporting any remaining gain as explained under Postponement of Gain, later.

Actual reimbursement same as expected. If you later

receive exactly the reimbursement you expected to receive, you don’t have to include any of the reimbursement

in your income and you can’t deduct any additional loss.

Example. In December 2025, your personal car was

damaged in a flood that was a federally declared disaster.

Repairs to the car cost $950. You had $100 deductible

comprehensive insurance. Your insurance company

agreed to reimburse you for the rest of the damage. Because you expected a reimbursement from the insurance

company, you didn’t have a casualty loss deduction in

2025.

Due to the $100 rule, you can’t deduct the $100 you

paid as the deductible. When you receive the $850 from

the insurance company in 2026, don’t report it as income.

Deduction Limits

After you have figured the amount of your casualty or theft

loss, you must figure how much of the loss you can deduct.

The deduction for casualty and theft losses of personal-use property is limited. For tax years beginning after

2017, personal casualty and theft losses of an individual

are deductible only to the extent they’re attributable to a

federally declared disaster. Personal casualty and theft

losses attributable to a federally declared disaster are

subject to the $100 per casualty and 10% rules, discussed

later. The $100 and 10% rules are also summarized in Table 2.

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

casualty gains for the tax year. In this case, you may reduce your personal casualty gains by any casualty losses

not attributable to a federally declared disaster. Any

Publication 547 (2025)

excess gain is used to reduce losses from a federally declared disaster. The 10% rule is applied to any federal disaster losses that remain.

Losses on business property and income-producing

property aren’t subject to these rules. However, if your

casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited.

See the instructions for Form 4684, Section B. If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and

its instructions.

$100 Rule

After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce

that loss by $100. This reduction applies to each total

casualty or theft loss, including those losses not attributable to a federally declared disaster that are applied to reduce your personal casualty gains. It doesn’t matter how

many pieces of property are involved in an event. Only a

single $100 reduction applies.

Example. You have $750 deductible collision insurance on your car. The car is damaged in a collision. The

insurance company pays you for the damage minus the

$750 deductible. The amount of the casualty loss is based

solely on the deductible. The casualty loss is $650 ($750

− $100) because the first $100 of a casualty loss on personal-use property isn’t deductible.

Caution: Qualified disaster losses must be reduced by

$500. See Disaster Area Losses, later, for more information.

Single event. Generally, events closely related in origin

cause a single casualty. It is a single casualty when the

damage is from two or more closely related causes, such

as wind and flood damage caused by the same storm. A

single casualty may also damage two or more pieces of

property, such as a tornado that damages both your home

and your car parked in your driveway.

Example 1. A tornado destroyed your pleasure boat.

You also lost some boating equipment in the storm. Your

loss was $5,000 on the boat and $1,200 on the equipment. Your insurance company reimbursed you $4,500 for

the damage to your boat. You had no insurance coverage

on the equipment. Your casualty loss is from a single

event and the $100 rule applies once. Figure your loss before applying the 10% rule (discussed later) as follows.

Boat

1. Loss . . . . . . . . . . . . . . . . . .

2. Subtract insurance . . . . . . . . .

3. Loss after reimbursement . . . . .

Equipment

$5,000

4,500

$ 500

$1,200

-0$1,200

4. Total loss . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract $100 . . . . . . . . . . . . . . . . . . . . .

6. Loss before 10% rule . . . . . . . . . . . . . . . .

$1,700

100

$1,600

Publication 547 (2025)

Example 2. Thieves broke into your home in January

and stole a ring and a fur coat. You had a loss of $200 on

the ring and $700 on the coat. This is a single theft. The

$100 rule applies to the total $900 loss.

Example 3. In October, hurricane winds blew the roof

off your home. Flood waters caused by the hurricane further damaged your home and destroyed your furniture and

personal car. This is considered a single casualty. The

$100 rule is applied to your total loss from the flood waters

and the wind.

More than one loss. If you have more than one casualty

or theft loss during your tax year, you must reduce each

loss by $100.

Example. Your family car was damaged in a storm in

January. Your loss after the insurance reimbursement was

$75. In February, your car was damaged in another storm.

This time your loss after the insurance reimbursement was

$90. Apply the $100 rule to each separate casualty loss.

Since neither storm resulted in a loss of over $100, you

aren’t entitled to any deduction for these storms.

More than one person. If two or more individuals (other

than spouses filing a joint return) have losses from the

same casualty or theft, the $100 rule applies separately to

each individual.

Example. Hurricane winds damaged your house and

also damaged the personal property of your house guest.

You must reduce your loss by $100. Your house guest

must reduce his or her loss by $100.

Married taxpayers. If you and your spouse file a joint

return, you are treated as one individual in applying the

$100 rule. It doesn’t matter whether you own the property

jointly or separately.

If you and your spouse have a casualty or theft loss and

you file separate returns, each of you must reduce your

loss by $100. This is true even if you own the property

jointly. If one spouse owns the property, only that spouse

can claim a loss deduction on a separate return.

If the casualty or theft loss is on property you own as

tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. Neither of you can figure your deduction on the entire loss on

a separate return. Each of you must reduce the loss by

$100.

More than one owner. If two or more individuals (other

than spouses filing a joint return) have a loss on property

jointly owned, the $100 rule applies separately to each.

For example, if two sisters live together in a home they

own jointly and they have a casualty loss on the home, the

$100 rule applies separately to each sister.

10% Rule

You must reduce your total federal casualty losses by 10%

of your AGI. Apply this rule after you reduce each loss by

$100. For more information, see the Instructions for Form

15

4684. If you have both gains and losses from casualties or

thefts, see Gains and losses, later in this discussion.

by $100 but before you have reduced the federal casualty

losses by 10% of your AGI.

Example. In September, your house was damaged by

a tropical storm that was a federally declared disaster.

Your loss after insurance reimbursement was $2,000. Your

AGI for the year the loss was sustained is $29,500. Figure

your casualty loss as follows.

Caution: Casualty or theft gains don’t include gains

you choose to postpone. See Postponement of Gain,

later.

1.

2.

3.

4.

5.

Loss after insurance . . . . . . . . . . . . . . . . . . . .

Subtract $100 . . . . . . . . . . . . . . . . . . . . . . . .

Loss after $100 rule . . . . . . . . . . . . . . . . . . . .

Subtract 10% of $29,500 AGI . . . . . . . . . . . . . .

Casualty loss deduction . . . . . . . . . . . . . . . .

$2,000

100

$1,900

$2,950

$ -0-

You don’t have a casualty loss deduction because your

loss ($1,900) is less than 10% of your AGI ($2,950).

Caution: The 10% rule doesn’t apply to qualified disaster losses. See Disaster Area Losses, later, for more information.

More than one loss. If you have more than one casualty

or theft loss during your tax year, reduce each loss by any

reimbursement and by $100. Then you must reduce your

total federal casualty losses by 10% of your AGI.

Example. In March, your car was destroyed in a flood

that was a federally declared disaster. You didn’t have insurance on your car, so you didn’t receive any insurance

reimbursement. Your loss on the car was $1,800. In November, another flood, which was also a federally declared disaster, damaged your basement and totally destroyed the furniture, washer, dryer, and other items you

had stored there. Your loss on the basement items after

reimbursement from your insurer was $2,100. Your AGI for

the year that the floods occurred is $25,000. You figure

your casualty loss deduction as follows.

Car

1. Loss . . . . . . . . . . . . . . . . . . .

2. Subtract $100 per incident . . . . .

3. Loss after $100 rule . . . . . . . . .

Basement

$1,800

100

$1,700

$2,100

100

$2,000

4. Total loss . . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract 10% of $25,000 AGI . . . . . . . . . . . .

6. Casualty loss deduction . . . . . . . . . . . . . .

$3,700

2,500

$1,200

Married taxpayers. If you and your spouse file a joint return, you are treated as one individual in applying the 10%

rule. It doesn’t matter if you own the property jointly or

separately.

If you file separate returns, the 10% rule applies to each

return on which a loss is claimed.

More than one owner. If two or more individuals (other

than spouses filing a joint return) have a loss on property

that is owned jointly, the 10% rule applies separately to

each.

Gains and losses. If you have casualty or theft gains as

well as losses to your personal-use property, you must

compare your total gains to your total losses. Do this after

you have reduced each loss by any reimbursements and

16

Losses more than gains. If your losses are more

than your recognized gains, subtract your gains from your

losses and reduce the result by 10% of your AGI. The rest,

if any, is your deductible loss from personal-use property.

If you have losses not attributable to a federally declared disaster, see Line 14 in the Instructions for Form

4684. Losses not attributable to a federally declared disaster can be used only to offset gains.

If you have qualified disaster losses, see Line 15 in the

Instructions for Form 4684 for more details.

Example. Your theft loss after reducing it by reimbursements and by $100 is $2,700. Your casualty gain is

$700. Because your theft loss wasn’t attributable to a federally declared disaster, you can only use $700 of your

loss to offset the $700 casualty gain.

Gains more than losses. If your recognized gains are

more than your losses, subtract your losses from your

gains. The difference is treated as a capital gain and must

be reported on Schedule D (Form 1040). The 10% rule

doesn’t apply to your gains. If you have losses not attributable to a federally declared disaster, see Line 14 in the Instructions for Form 4684.

Example. Your theft loss is $600 after reducing it by reimbursements and by $100. Your casualty gain is $1,600.

Because your gain is more than your loss, you must report

the $1,000 net gain ($1,600 − $600) on Schedule D (Form

1040).

More information. For information on how to figure

recognized gains, see Figuring a Gain, later.

Figuring the Deduction

Generally, you must figure your loss separately for each

item stolen, damaged, or destroyed. However, a special

rule applies to real property you own for personal use.

Real property. In figuring a loss to real estate you own

for personal use, all improvements (such as buildings and

ornamental trees and the land containing the improvements) are considered together.

Example 1. In June, a tornado destroyed your lakeside cottage, which cost $144,800 (including $14,500 for

the land) several years ago. (Your land wasn’t damaged.)

This was your only casualty or theft loss for the year. The

FMV of the property immediately before the tornado was

$180,000 ($145,000 for the cottage and $35,000 for the

land). The FMV immediately after the tornado was

$35,000 (value of the land). You collected $130,000 from

the insurance company. Your AGI for the year the tornado

occurred is $80,000. Your deduction for the casualty loss

is $6,700, figured in the following manner.

Publication 547 (2025)

1. Adjusted basis of the entire property (cost in

this example) . . . . . . . . . . . . . . . . . . . . . .

2. FMV of entire property before tornado . . . . . .

3. FMV of entire property after tornado . . . . . . .

4. Decrease in FMV of entire property

(line 2 − line 3) . . . . . . . . . . . . . . . . . . . . .

5. Loss (smaller of line 1 or line 4) . . . . . . . . . .

6. Subtract insurance . . . . . . . . . . . . . . . . . .

7. Loss after reimbursement . . . . . . . . . . . . . .

8. Subtract $100 . . . . . . . . . . . . . . . . . . . . .

9. Loss after $100 rule . . . . . . . . . . . . . . . . .

10. Subtract 10% of $80,000 AGI . . . . . . . . . . .

11. Casualty loss deduction . . . . . . . . . . . . . .

$144,800

$180,000

35,000

$145,000

$144,800

130,000

$14,800

100

$14,700

8,000

$ 6,700

Example 2. You bought your home a few years ago.

You paid $150,000 ($10,000 for the land and $140,000 for

the house). You also spent an additional $2,000 for landscaping. This year a hurricane destroyed your home. The

hurricane also damaged the shrubbery and trees in your

yard. The hurricane was your only casualty or theft loss

this year. Competent appraisers valued the property as a

whole at $175,000 before the hurricane but only $50,000

after the hurricane. Shortly after the hurricane, the insurance company paid you $95,000 for the loss. Your AGI for

this year is $70,000. You figure your casualty loss deduction as follows.

1. Adjusted basis of the entire property (cost of

land, building, and landscaping) . . . . . . . . . .

2. FMV of entire property before hurricane . . . . .

3. FMV of entire property after hurricane . . . . . .

4. Decrease in FMV of entire property

(line 2 − line 3)

5. Loss (smaller of line 1 or line 4) . . . . . . . . . .

6. Subtract insurance . . . . . . . . . . . . . . . . . .

7. Loss after reimbursement . . . . . . . . . . . . . .

8. Subtract $100 . . . . . . . . . . . . . . . . . . . . .

9. Loss after $100 rule . . . . . . . . . . . . . . . . .

10. Subtract 10% of $70,000 AGI . . . . . . . . . . .

11. Casualty loss deduction . . . . . . . . . . . . . .

$152,000

$175,000

50,000

$125,000

$125,000

95,000

$30,000

100

$29,900

7,000

$ 22,900

Personal property. Personal property is any property

that isn’t real property. If your personal property is stolen

or is damaged or destroyed by a casualty, you must figure

your loss separately for each item of property. Then combine these separate losses to figure the total loss. Reduce

the total loss by $100 and 10% of your AGI to figure the

loss deduction.

Example 1. In August, a storm that was determined to

be a federally declared disaster destroyed your pleasure

boat, which cost $18,500. This was your only casualty or

theft loss for the year. Its FMV immediately before the

storm was $17,000. You had no insurance but were able

to salvage the motor of the boat and sell it for $200. Your

AGI for the year the casualty occurred is $70,000.

Although the motor was sold separately, it is part of the

boat and not a separate item of property. You figure your

casualty loss deduction as follows.

1. Adjusted basis (cost in this example) . . . . . . .

$18,500

2. FMV before storm . . . . . . . . . . . . . . . . . . .

3. FMV after storm . . . . . . . . . . . . . . . . . . . .

4. Decrease in FMV (line 2 − line 3) . . . . . . . . . .

$17,000

200

$16,800

5. Loss (smaller of line 1 or line 4) . . . . . . . . . . .

6. Subtract insurance . . . . . . . . . . . . . . . . . .

7. Loss after reimbursement . . . . . . . . . . . . . .

8. Subtract $100 . . . . . . . . . . . . . . . . . . . . . .

9. Loss after $100 rule . . . . . . . . . . . . . . . . . .

10. Subtract 10% of $70,000 AGI . . . . . . . . . . . .

11. Casualty loss deduction . . . . . . . . . . . . . .

$16,800

-0$16,800

100

$16,700

7,000

$ 9,700

Example 2. In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. You had bought the car for $30,000.

The FMV of the car just before the accident was $17,500.

Its FMV just after the accident was $180 (scrap value).

Your insurance company reimbursed you $16,000.

Your watch wasn’t insured. You had purchased it for

$250. Its FMV just before the accident was $500. In the

same year, you also had a $2,000 casualty gain and a

separate $5,000 casualty loss attributable to a federally

declared disaster. Your AGI for the year is $97,000. Your

casualty loss deduction is zero, figured as follows.

1. Adjusted basis (cost) . . . . . . . . . . .

Car

$30,000

Watch

$250

2. FMV before accident . . . . . . . . . . .

3. FMV after accident . . . . . . . . . . . .

4. Decrease in FMV (line 2 − line 3) . . . .

$17,500

180

$17,320

$500

-0$500

5. Loss (smaller of line 1 or line 4) . . . . .

6. Subtract insurance . . . . . . . . . . . .

7. Loss after reimbursement . . . . . . . .

$17,320

16,000

$1,320

$250

-0$250

8. Total loss . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Subtract $100 . . . . . . . . . . . . . . . . . . . . . . . .

10. Loss not attributable to a federally declared disaster

after $100 rule . . . . . . . . . . . . . . . . . . . . . . . .

11. Casualty gain . . . . . . . . . . . . . . . . . . . . . . . . .

12. Casualty loss not attributable to a federally declared

disaster . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13. Remaining gain after offsetting the loss not

attributable to a federally declared disaster

(line 11 − line 12; if zero or less, enter -0-) . . . . . . .

14. Casualty loss attributable to a federally declared

disaster . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Subtract $100 . . . . . . . . . . . . . . . . . . . . . . . .

16. Loss after $100 rule . . . . . . . . . . . . . . . . . . . . .

17. Subtract remaining gain (line 13) . . . . . . . . . . . . .

18. Loss after subtracting gain . . . . . . . . . . . . . . . . .

19. Subtract 10% of $97,000 AGI . . . . . . . . . . . . . . .

20. Casualty loss deduction attributable to a

federally declared disaster . . . . . . . . . . . . . . .

$1,570

100

$1,470

$2,000

1,470

$530

$5,000

100

$4,900

530

$4,370

9,700

$ -0-

Both real and personal properties. When a casualty

involves both real and personal properties, you must figure the loss separately for each type of property. However,

you apply a single $100 reduction to the total loss. Then

you apply the 10% rule to figure the casualty loss deduction.

Example. In July, a hurricane, which was a federally

declared disaster, damaged your home, which cost you

Publication 547 (2025)

17

$164,000 including land. The FMV of the property (both

building and land) immediately before the storm was

$170,000 and its FMV immediately after the storm was

$100,000. Your household furnishings were also damaged. You separately figured the loss on each damaged

household item and arrived at a total loss of $600.

You collected $50,000 from the insurance company for

the damage to your home, but your household furnishings

weren’t insured. Your AGI for the year the hurricane occurred is $65,000. You figure your casualty loss deduction

from the hurricane in the following manner.

1. Adjusted basis of real property (cost in this

example) . . . . . . . . . . . . . . . . . . . . . . .

2. FMV of real property before hurricane . . . . .

3. FMV of real property after hurricane . . . . . .

4. Decrease in FMV of real property

(line 2 − line 3) . . . . . . . . . . . . . . . . . . . .

5. Loss on real property (smaller of line 1 or

line 4) . . . . . . . . . . . . . . . . . . . . . . . . .

6. Subtract insurance . . . . . . . . . . . . . . . . .

7. Loss on real property after reimbursement . .

$164,000

$170,000

100,000

$70,000

$70,000

50,000

$20,000

8. Loss on furnishings . . . . . . . . . . . . . . . . .

9. Subtract insurance . . . . . . . . . . . . . . . . .

10. Loss on furnishings after reimbursement . . . .

$600

-0$600

11. Total loss (line 7 plus line 10) . . . . . . . . . . .

12. Subtract $100 . . . . . . . . . . . . . . . . . . . .

13. Loss after $100 rule . . . . . . . . . . . . . . . .

14. Subtract 10% of $65,000 AGI . . . . . . . . . . .

15. Casualty loss deduction . . . . . . . . . . . . .

$20,600

100

$20,500

6,500

$14,000

Property used partly for business and partly for personal purposes. When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be

figured separately for the personal-use portion and for the

business or income-producing portion. You must figure

each loss separately because the losses attributed to

these two uses are figured in two different ways. When figuring each loss, allocate the total cost or basis, the FMV

before and after the casualty or theft loss, and the insurance or other reimbursement between the business and

personal use of the property. The $100 rule and the 10%

rule apply only to the casualty or theft loss on the personal-use portion of the property.

Example. You own a building that you constructed on

leased land. You use half of the building for your business

and you live in the other half. The cost of the building was

$400,000. You made no further improvements or additions

to it.

In March, a flood that was determined to be a federally

declared disaster damaged the entire building. The FMV

of the building was $380,000 immediately before the flood

and $320,000 afterwards. Your insurance company reimbursed you $40,000 for the flood damage. Depreciation

on the business part of the building before the flood totaled $24,000. Your adjusted gross income for the year the

flood occurred is $125,000.

You have a deductible business casualty loss of

$10,000. You don’t have a deductible personal casualty

18

loss because of the 10% rule. You figure your loss as follows.

Business Part

Personal Part

1. Cost (total $400,000) . . . . . .

2. Subtract depreciation . . . . . .

$200,000

24,000

$200,000

-0-

3. Adjusted basis . . . . . . . . . .

$176,000

$200,000

$190,000

$190,000

160,000

160,000

$30,000

$30,000

$30,000

20,000

$30,000

20,000

$10,000

$10,000

4. FMV before flood (total

$380,000) . . . . . . . . . . . .

5. FMV after flood (total

$320,000) . . . . . . . . . . . .

6. Decrease in FMV

(line 4 − line 5) . . . . . . . . . .

7. Loss (smaller of line 3 or

line 6) . . . . . . . . . . . . . . .

8. Subtract insurance . . . . . . .

9. Loss after reimbursement . . .

10. Subtract $100 on personal-use

property . . . . . . . . . . . . .

11. Loss after $100 rule . . . . . . .

12. Subtract 10% of $125,000 AGI

on personal-use property . . .

13. Deductible business loss . .

-0-

100

$10,000

$9,900

-0-

12,500

$10,000

14. Deductible personal loss . . . . . . . . . . . . . .

$ -0-

Figuring a Gain

If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain

from the casualty or theft. Your gain is figured as follows.

• The amount you receive (discussed next), minus

• Your adjusted basis in the property at the time of the

casualty or theft. See Adjusted Basis, earlier, for more

information.

Even if the decrease in FMV of your property is smaller

than the adjusted basis of your property, use your adjusted basis to figure the gain.

Amount you receive. The amount you receive includes

any money plus the value of any property you receive minus any expenses you incur in obtaining reimbursement. It

also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen

property.

Example. A hurricane destroyed your personal residence and the insurance company awarded you

$145,000. You received $140,000 in cash. The remaining

$5,000 was paid directly to the holder of a mortgage on

the property. The amount you received includes the

$5,000 reimbursement paid on the mortgage.

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

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the 5-year period ending on the date it was destroyed. For

information on this exclusion, see Pub. 523. If your gain is

more than the amount you can exclude but you buy replacement property, you may be able to postpone reporting the excess gain. See Postponement of Gain, later.

Reporting a gain. You must generally report your gain as

income in the year you receive the reimbursement. However, you don’t have to report your gain if you meet certain

requirements and choose to postpone reporting the gain

according to the rules explained under Postponement of

Gain next.

For information on how to report a gain, see How To

Report Gains and Losses, later.

Caution: If you have a casualty or theft gain on personal-use property that you choose to postpone reporting

(as explained next) and you also have another casualty or

theft loss on personal-use property, don’t consider the

gain you are postponing when figuring your casualty or

theft loss deduction. See 10% Rule under Deduction Limits, earlier.

Postponement of Gain

Don’t report a gain if you receive reimbursement in the

form of property similar or related in service or use to the

destroyed or stolen property. Your basis in the new property is generally the same as your adjusted basis in the

property it replaces.

You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property

as reimbursement. However, you can choose to postpone

reporting the gain if you purchase property that is similar

or related in service or use to the stolen or destroyed

property within a specified replacement period, discussed

later. You can also choose to postpone reporting the gain

if you purchase a controlling interest (at least 80%) in a

corporation owning property that is similar or related in

service or use to the property. See Controlling interest in a

corporation, later.

If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to

restore the property.

To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. If the cost of the replacement

property is less than the reimbursement, you must include

the gain in your income up to the amount of the unspent

reimbursement.

Example. In 1970, you bought an oceanfront cottage

for your personal use at a cost of $18,000. You made no

further improvements or additions to it. When a storm destroyed the cottage in January, the cottage was worth

$250,000. You received $146,000 from the insurance

company in March. You had a gain of $128,000 ($146,000

− $18,000).

You spent $144,000 to rebuild the cottage. Because

this is less than the insurance proceeds received, you

Publication 547 (2025)

must include $2,000 ($146,000 − $144,000) in your income.

Buying replacement property from a related person.

You can’t postpone reporting a gain from a casualty or

theft if you buy the replacement property from a related

person (discussed later). This rule applies to the following

taxpayers.

1. C corporations.

2. Partnerships in which more than 50% of the capital or

profits interests is owned by C corporations.

3. All others (including individuals, partnerships (other

than those in (2)), and S corporations) if the total realized gain for the tax year on all destroyed or stolen

properties on which there are realized gains is more

than $100,000.

For casualties and thefts described in (3) above, gains

can’t be offset by any losses when determining whether

the total gain is more than $100,000. If the property is

owned by a partnership, the $100,000 limit applies to the

partnership and each partner. If the property is owned by

an S corporation, the $100,000 limit applies to the S corporation and each shareholder.

Exception. This rule doesn’t apply if the related person acquired the property from an unrelated person within

the period of time allowed for replacing the destroyed or

stolen property.

Related persons. Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than

50% of its outstanding stock, and two partnerships in

which the same C corporations own more than 50% of the

capital or profits interests. For more information on related

persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Pub.

544.

Death of a taxpayer. If a taxpayer dies after having a

gain but before buying replacement property, the gain

must be reported for the year in which the decedent realized the gain. The executor of the estate or the person

succeeding to the funds from the casualty or theft can’t

postpone reporting the gain by buying replacement property.

Replacement Property

You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. Property you acquire as a gift or inheritance doesn’t qualify.

You don’t have to use the same funds you receive as

reimbursement for your old property to acquire the replacement property. If you spend the money you receive

from the insurance company for other purposes, and borrow money to buy replacement property, you can still postpone reporting the gain if you meet the other requirements.

19

Advance payment. If you pay a contractor in advance to

replace your destroyed or stolen property, you aren’t considered to have bought replacement property unless it is

finished before the end of the replacement period. See

Replacement Period, later.

Similar or related in service or use. Replacement

property must be similar or related in service or use to the

property it replaces.

Timber loss. Standing timber (not land) you bought

with the proceeds from the sale of timber downed by a

casualty (such as high winds, earthquakes, or volcanic

eruptions) qualifies as replacement property. If you bought

the standing timber within the specified replacement period, you can postpone reporting the gain.

Owner-user. If you are an owner-user, “similar or related in service or use” means that replacement property

must function in the same way as the property it replaces.

Example. Your home was destroyed by fire and you invested the insurance proceeds in a grocery store. Your replacement property isn’t similar or related in service or use

to the destroyed property. To be similar or related in service or use, your replacement property must also be used

by you as your home.

Main home in disaster area. Special rules apply to

replacement property related to the damage or destruction of your main home (or its contents) if located in a federally declared disaster area. For more information, see

Gains Realized on Homes in Disaster Areas, later.

Owner-investor. If you are an owner-investor, “similar

or related in service or use” means that any replacement

property must have a similar relationship of services or

uses to you as the property it replaces. You decide this by

determining all of the following.

• Whether the properties are of similar service to you.

• The nature of the business risks connected with the

properties.

• What the properties demand of you in the way of management, service, and relations to your tenants.

Example. You owned land and a building you rented to

a manufacturing company. The building was destroyed by

a tornado. During the replacement period, you had a new

building constructed. You rented out the new building for

use as a wholesale grocery warehouse. Because the replacement property is also rental property, the two properties are considered similar or related in service or use if

there is a similarity in all of the following areas.

• Your management activities.

• The amount and kind of services you provide to your

tenants.

• The nature of your business risks connected with the

properties.

Business or income-producing property located in

a federally declared disaster area. If your destroyed

business or income-producing property was located in a

20

federally declared disaster area, any tangible replacement

property you acquire for use in any business is treated as

similar or related in service or use to the destroyed property. The replacement property doesn’t have to be located

in the federally declared disaster area. For more information, see Disaster Area Losses, later.

Controlling interest in a corporation. You can replace

property by acquiring a controlling interest in a corporation

that owns property similar or related in service or use to

your damaged, destroyed, or stolen property. You can

postpone reporting your entire gain if the cost of the stock

that gives you a controlling interest is at least as much as

the amount received (reimbursement) for your property.

You have a controlling interest if you own stock having at

least 80% of the combined voting power of all classes of

voting stock and at least 80% of the total number of

shares of all other classes of stock.

Basis adjustment to corporation’s property. The

basis of property held by the corporation at the time you

acquired control must be reduced by the amount of your

postponed gain, if any. You aren’t required to reduce the

adjusted basis of the corporation’s properties below your

adjusted basis in the corporation’s stock (determined after

reduction by the amount of your postponed gain).

Allocate this reduction to the following classes of property in the order shown below.

1. Property that is similar or related in service or use to

the destroyed or stolen property.

2. Depreciable property not reduced in (1).

3. All other property.

If two or more properties fall in the same class, allocate

the reduction to each property in proportion to the adjusted bases of all the properties in that class. The reduced

basis of any single property can’t be less than zero.

Main home replaced. If your gain from the reimbursement you receive because of the destruction of your main

home is more than the amount you can exclude from your

income (see Main home destroyed under Figuring a Gain,

earlier), you can postpone reporting the excess gain by

buying replacement property that is similar or related in

service or use. To postpone reporting all the excess gain,

the replacement property must cost at least as much as

the amount you received because of the destruction minus the excluded gain.

Also, if you postpone reporting any part of your gain under these rules, you are treated as having owned and

used the replacement property as your main home for the

period you owned and used the destroyed property as

your main home.

Basis of replacement property. You must reduce the

basis of your replacement property (its cost) by the

amount of postponed gain. In this way, tax on the gain is

postponed until you dispose of the replacement property.

Example. A fire destroyed your rental home that you

never lived in. The insurance company reimbursed you

Publication 547 (2025)

$67,000 for the property, which had an adjusted basis of

$62,000. You had a gain of $5,000 from the casualty. If

you have another rental home constructed for $110,000

within the replacement period, you can postpone reporting

the gain. You will have reinvested all the reimbursement

(including your entire gain) in the new rental home. Your

basis for the new rental home will be $105,000 ($110,000

cost − $5,000 postponed gain).

Replacement Period

To postpone reporting your gain, you must buy replacement property within a specified period of time. This is the

replacement period.

The replacement period begins on the date your property was damaged, destroyed, or stolen.

The replacement period generally ends 2 years after

the close of the first tax year in which any part of your gain

is realized.

Example. You are a calendar year taxpayer. While you

were on vacation, a valuable piece of antique furniture that

cost $2,200 was stolen from your home. You discovered

the theft when you returned home on July 7, 2025. Your insurance company investigated the theft and didn’t settle

your claim until January 22, 2026, when they paid you

$3,000. You first realized a gain from the reimbursement

for the theft during 2026, so you have until December 31,

2028, to replace the property.

Main home in disaster area. For your main home (or its

contents) located in a federally declared disaster area, the

replacement period generally ends 4 years after the close

of the first tax year in which any part of your gain is realized. See Disaster Area Losses, later.

Example. You are a calendar year taxpayer. A hurricane destroyed your home in September 2025. In December 2025, the insurance company paid you $3,000 more

than the adjusted basis of your home. The area in which

your home is located isn’t a federally declared disaster

area. You first realized a gain from the reimbursement for

the casualty in 2025, so you have until December 31,

2027, to replace the property. If your home had been in a

federally declared disaster area, you would have until December 31, 2029, to replace the property.

Caution: The replacement period may vary for other

events. For information on the replacement period following a condemnation of property, see Involuntary Conversions in chapter 1 of Pub. 544. For information on the replacement period following the weather-related sale or

exchange of livestock, see chapter 11 of Pub. 225.

Extension. You can request an extension of the replacement period. You should request the extension before the

end of the replacement period. Ordinarily, requests for extensions aren’t made or granted until near the end of the

replacement period or the extended replacement period.

Publication 547 (2025)

About the extension. Extensions are usually limited

to a period of not more than 1 year. The high market value

or scarcity of replacement property isn’t sufficient grounds

for granting an extension. If your replacement property is

being constructed and you clearly show that the construction can’t be completed within the replacement period, you

may be granted an extension of the period.

Making your request. You can request an extension

of the replacement period by faxing your written request to

877-477-9193 or mailing your request to Internal Revenue

Service, 985 Michigan Ave., Stop 16, Detroit, MI 48226.

The submission should include a cover sheet with the following information.

• Date.

• Your name, title, phone number, and address.

• Attention: SB/SE Field Examination Area Director

[Your State].

• Subject: 1033 Extension Request for Replacement

Period of Involuntarily Converted Property.

• Number of pages faxed (inclusive of cover sheet).

What to include in your request. Your request must

contain all the details describing why you need the extension. Include:

1. The name, address, and taxpayer identification number of the taxpayer,

2. A detailed description of the property converted,

3. Date the property was converted,

4. Adjusted basis of the property converted,

5. Date(s) and amount(s) of the payments received,

6. Copy of the return with the involuntary conversion of

property at a gain and related deferral of the gain, and

7. A description of the actions taken to replace the property.

Filing after the replacement period. You can file a

request within a reasonable time after the replacement period ends if you can show a good reason for the delay. An

extension may be granted if you can show that there is a

reasonable cause for not making the replacement within

the replacement period.

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.

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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.

If a partnership or a corporation owns the stolen or destroyed property, only the partnership or corporation can

choose to postpone reporting the gain.

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.

• How you figured the gain.

For details on how to postpone gain, see How To Postpone a Gain, later.

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.

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 your home and

its contents.

If you reinvest the remaining insurance proceeds of

$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 for more information on gain that may be

excluded on a sale, including the receipt of insurance proceeds for a destruction of your home.

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.

How To Postpone a Gain

You postpone reporting your gain from a casualty or theft

by reporting your choice on your tax return for the year you

have the gain. You have the gain in the year you receive

insurance proceeds or other reimbursements that result in

a gain.

22

Required statement. You should attach a statement to

your return for the year you have the gain. This statement

should include the following.

• The date and details of the casualty or theft.

• The insurance or other reimbursement you received

from the casualty or theft.

Replacement property acquired before return filed.

If you acquire replacement property before you file your return for the year you have the gain, your statement should

also include detailed information about all of the following.

• The replacement property.

• The postponed gain.

• The basis adjustment that reflects the postponed gain.

• Any gain you are reporting as income.

Replacement property acquired after return filed.

If you intend to acquire replacement property after you file

your return for the year in which you have the gain, your

statement should also state that you are choosing to replace the property within the required replacement period.

You should then attach another statement to your return

for the year in which you acquire the replacement property. This statement should contain detailed information

on the replacement property.

If you acquire part of your replacement property in one

year and part in another year, you must make a statement

for each year. The statement should contain detailed information on the replacement property acquired in that year.

Substituting replacement property. Once you have acquired qualified replacement property that you designate

as replacement property in a statement attached to your

tax return, you can’t later substitute other qualified replacement property. This is true even if you acquire the

other property within the replacement period. However, if

you discover that the original replacement property wasn’t

qualified replacement property, you can (within the replacement period) substitute the new qualified replacement property.

Amended return. You must file an amended return (individuals use Form 1040-X) for the tax year of the gain in either of the following situations.

• You don’t acquire replacement property within the re-

quired replacement period plus extensions. On this

amended return, you must report the gain and pay any

additional tax due.

• You acquire replacement property within the required

replacement period plus extensions, but at a cost less

than the amount you receive for the casualty or theft.

On this amended return, you must report the portion of

the gain that can’t be postponed and pay any additional tax due.

Publication 547 (2025)

Three-year limit. The period for assessing tax on any

gain ends 3 years after the date you notify the director of

the IRS for your area of any of the following.

• You replaced the property.

• You don’t intend to replace the property.

• You didn’t replace the property within the replacement

period.

Changing your mind. You can change your mind about

whether to report or to postpone reporting your gain at any

time before the end of the replacement period.

Example. Your property was destroyed in 2024 due to

a federally declared disaster. Your insurance company reimbursed you $10,000, of which $5,000 was a gain. You

reported the $5,000 gain on your return for 2024 (the year

you realized the gain) and paid the tax due. In 2025, you

bought replacement property. Your replacement property

cost $9,000. Because you reinvested all but $1,000 of

your reimbursement, you can now postpone reporting

$4,000 ($5,000 − $1,000) of your gain.

To postpone reporting your gain, file an amended return

for 2024 using Form 1040-X. You should attach an explanation showing that you previously reported the entire gain

from the casualty but you now want to report only the part

of the gain ($1,000) equal to the part of the reimbursement

not spent for replacement property.

When To Report Gains and

Losses

Gains. If you receive an insurance or other reimbursement that is more than your adjusted basis in the destroyed or stolen property, you have a gain from the casualty or theft. You must include this gain in your income in

the year you receive the reimbursement, unless you

choose to postpone reporting the gain, as explained earlier.

Losses. Generally, you can deduct a casualty loss that

isn’t reimbursable only in the tax year in which the casualty occurred. This is true even if you don’t repair or replace the damaged property until a later year. (However,

see Disaster Area Losses, later, for an exception.)

You can deduct theft losses that aren’t reimbursable

only in the year you discover your property was stolen.

If in the year of the casualty there is a claim for reimbursement with a reasonable prospect of recovery, the

loss isn’t 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. The later tax year is when your loss is sustained.

Loss on deposits. If your loss is a loss on deposits at

an insolvent or bankrupt financial institution, see Loss on

Deposits, earlier.

Publication 547 (2025)

Lessee’s loss. If you lease property from someone

else, you can deduct a loss on the property in the year

your liability for the loss is determined. This is true even if

the loss occurred or the liability was paid in a different

year. You aren’t entitled to a deduction until your liability

under the lease can be determined with reasonable accuracy. Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned.

Disaster Area Losses

This section discusses the special rules that apply to federally declared disaster area losses. It contains information on when you can deduct your loss, how to claim your

loss, how to treat your home in a disaster area, and what

tax deadlines may be postponed. It also lists Federal

Emergency Management Agency (FEMA) phone numbers. (See Contacting the Federal Emergency Management Agency (FEMA), later.)

A disaster loss is a loss that occurred in an area determined by the President of the United States to warrant assistance by the federal government under the Stafford Act

and that is attributable to a federally declared disaster.

Disaster areas include areas warranting public or individual assistance (or both). A federally declared disaster includes a major disaster or emergency declaration.

Tip: A list of the areas warranting public or individual

assistance (or both) under the Stafford Act is available at

FEMA.gov/Disaster.

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.

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.

When to deduct the loss. You must generally deduct a

casualty loss in the disaster year. However, 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 that loss on your return

23

or amended return for the tax year immediately preceding

the disaster year. If you make this election, the loss is treated as having occurred in the preceding year. A list of

areas warranting public or individual assistance (or both)

is available at the FEMA website at FEMA.gov/Disaster.

You must make the election to take your casualty loss

for the disaster in the preceding year 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. If

you are a calendar year taxpayer, you have until October

15, 2026, to amend your 2024 tax return to claim a casualty loss that occurred during 2025.

How to deduct your loss in the preceding year. If you

have already filed your return for the preceding year, you

can elect to claim a disaster loss against that year’s income by filing an amended return. Individuals file an

amended return on Form 1040-X. (See How to report the

loss on Form 1040-X, later.)

To make this election, complete Part I of Section D on

the 2024 Form 4684 and attach it to your 2024 return or

amended return that claims the disaster loss deduction.

You must make an election to deduct the loss in the

preceding year 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 individual calendar

year taxpayers, the deadline for electing to take a 2025

disaster loss on your 2024 tax return is October 15, 2026.

See the 2024 Instructions for Form 4684 for more detailed

information on how to claim these losses on your original

or amended 2024 return.

If you claimed a deduction for a disaster loss on the tax

return for the disaster year and you wish to deduct the loss

in the preceding year, you must file an amended return to

remove the previously deducted loss on or before the date

you file the return or amended return for the preceding

year that includes the disaster loss deduction.

Tip: Claiming a qualifying disaster loss on the previous

year’s return may result in a lower tax for that year, often

producing or increasing a cash refund.

Revoking the election to deduct the loss in the

preceding year. Complete Part II of Section D on the

2024 Form 4684 if you want to revoke a 2025 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).

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 (revoking the previous disaster

loss election) 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.

24

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.

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 and to elect to claim the

loss in the preceding tax year.

Go to IRS.gov/DisasterTaxRelief for date-specific declarations associated with these disasters and for more information.

Increased standard deduction reporting. If you have a

net qualified disaster loss on Form 4684, line 15, and you

aren’t itemizing your deductions, you can claim an increased standard deduction using Schedule A (Form

1040) by doing the following.

1. Enter the amount from Form 4684, line 15, on the dotted line next to line 16 on Schedule A and the description “Net Qualified Disaster Loss.”

2. Also, enter on the dotted line next to line 16 your

standard deduction amount and the description

“Standard Deduction Claimed With Qualified Disaster

Loss.”

3. Combine these two amounts and enter on line 16 of

Schedule A and Form 1040 or 1040-SR, line 12e.

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, in the Instructions for Form 4684 for more information.

Publication 547 (2025)

Main home in disaster area. If your home is located in a

federally declared disaster area, you can postpone reporting the gain if you spend the reimbursement to repair or

replace your home. Special rules apply to replacement

property related to the damage or destruction of your main

home (or its contents) if located in these areas. For more

information, see Gains Realized on Homes in Disaster

Areas, earlier.

Home made unsafe by disaster. If your home is located

in a federally declared disaster area, your state or local

government may order you to tear it down or move it because it is no longer safe to live in because of the disaster.

If this happens, treat the loss in value as a casualty loss

from a disaster. Your state or local government must issue

the order for you to tear down or move the home within

120 days after the area is declared a disaster area.

Figure your loss in the same way as for casualty losses

of personal-use property. (See Figuring a Loss, earlier.) In

determining the decrease in FMV, use the value of your

home before you move it or tear it down as its FMV after

the casualty.

Unsafe home. Your home will be considered unsafe

only if both of the following apply.

• Your home is substantially more dangerous after the

disaster than it was before the disaster.

• The danger is from a substantially increased risk of future destruction from the disaster.

Example. Due to a severe storm, the President declared the county you live in a federal disaster area. Although your home has only minor damage from the storm,

a month later the county issues a demolition order. This

order is based on a finding that your home is unsafe due

to nearby mud slides caused by the storm. The loss in

your home’s value because the mud slides made it unsafe

is treated as a casualty loss from a disaster. The loss in

value is the difference between your home’s FMV immediately before the disaster and immediately after the disaster.

Figuring the loss deduction. When electing to deduct your loss in the preceding year, unless you have a

qualified disaster loss, discussed earlier, you must figure

the loss under the usual rules for casualty losses, as if it

occurred in the year preceding the disaster.

Example. A hurricane damaged your main home and

destroyed your furniture in September 2025. This was

your only casualty loss for the year. Your home is located

in a federally declared disaster area designated by FEMA

in September 2025 for public or individual assistance (or

both). The cost of your home and land was $134,000. The

FMV immediately before the disaster was $147,500 and

the FMV immediately afterward was $100,000. You separately figured the loss on each item of furniture (see Figuring the Deduction, earlier) and arrived at a total loss for

furniture of $3,000. Your insurance didn’t cover this type of

casualty loss, and you expect no reimbursement for either

your home or your furniture.

Publication 547 (2025)

You elect to amend your 2024 return to claim your

casualty loss for the disaster. Your AGI on your 2024 return was $71,000. Using the rules applicable to disaster

losses, you figure your casualty loss as follows.

House

Furnishings

1. Cost . . . . . . . . . . . . . . . . . .

$134,000

$10,000

2. FMV before disaster . . . . . . . .

3. FMV after disaster . . . . . . . . .

4. Decrease in FMV

(line 2 − line 3) . . . . . . . . . . .

5. Smaller of line 1 or line 4 . . . . .

6. Subtract estimated

insurance . . . . . . . . . . . . . .

7. Loss after reimbursement . . . .

$147,500

100,000

$8,000

5,000

$47,500

$3,000

$47,500

$3,000

-0$47,500

-0$3,000

Total loss . . . . . . . . . . . . . . . . . . . . . . . . .

Subtract $100 . . . . . . . . . . . . . . . . . . . . . .

Loss after $100 rule . . . . . . . . . . . . . . . . . .

Subtract 10% of $71,000 AGI . . . . . . . . . . . .

Amount of casualty loss deduction . . . . . .

$50,500

100

$50,400

7,100

$43,300

8.

9.

10.

11.

12.

How to report the loss on Form 1040-X. You should

adjust your deductions on Form 1040-X. The Instructions

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, earlier.

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. 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.

Records. You should keep the records that support

your loss deduction. You don’t have to attach them to the

amended return.

If your records were destroyed or lost, you may have to

reconstruct them. Information about reconstructing records is available at IRS.gov/Newsroom/ReconstructingRecords-After-a-Natural-Disaster-or-Casualty-Loss or see

Pub. 3067, IRS Disaster Assistance—Federally Declared

Disaster Area.

Need a copy of your tax return for the preceding

year? It will be easier to prepare Form 1040-X if you have

a copy of your tax return for the preceding year. If you had

your tax return completed by a tax preparer, he or she

should be able to provide you with a copy of your return. If

not, you can get a copy by filing Form 4506 with the IRS.

There is a fee for each return requested. However, if your

main home, principal place of business, or tax records are

located in a federally declared disaster area, this fee will

be waived. Write the name of the disaster in the top margin of Form 4506 (for example, “Arkansas Severe Storms

and Tornadoes”).

25

Other Disaster Issues

• Reasonable and necessary expenses incurred for the

Disaster loss to inventory. If your inventory loss qualifies as a casualty loss and is attributable to a federally declared disaster in an area designated by FEMA for public

or individual assistance (or both), you may elect to deduct

the loss on your return or amended return for the immediately preceding year. However, decrease your opening inventory for the year of the loss so that the loss won’t be reported again in inventories.

Qualified disaster relief payments also include amounts

paid to individuals affected by the disaster by a federal,

state, or local government in connection with a federally

declared disaster. These payments must be made from a

governmental fund, be based on individual or family

needs, and not be compensation for services. Payments

to businesses generally don’t qualify.

Federal loan canceled. If part of your federal disaster

loan was canceled under the Stafford Act, it is considered

to be reimbursement for the loss. The cancellation reduces your casualty loss deduction.

Federal disaster relief grants. Don’t include post-disaster relief grants received under the Stafford Act in your income if the grant payments are made to help you meet

necessary expenses or serious needs for medical, dental,

housing, personal property, transportation, or funeral expenses. Don’t deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these

disaster relief grants. If the casualty loss was specifically

reimbursed by the grant and you received the grant after

the year in which you deducted the casualty loss, see Reimbursement Received After Deducting Loss, earlier. Unemployment assistance payments under the Stafford Act

are taxable unemployment compensation.

State disaster relief grants for businesses. A grant

that a business receives under a state program to reimburse businesses for losses incurred for damage or destruction of property because of a disaster isn’t excludable

from income under the general welfare exclusion, as a gift,

as a qualified disaster relief payment (explained next), or

as a contribution to capital. However, the business can

choose to postpone reporting gain realized from the grant

if it buys qualifying replacement property within a certain

period of time. See Postponement of Gain, earlier, for the

rules that apply.

Qualified disaster relief payments. Qualified disaster

relief payments aren’t included in the income of individuals

to the extent any expenses compensated by these payments aren’t otherwise compensated for by insurance or

other reimbursement. These payments aren’t subject to

income tax, self-employment tax, or employment taxes

(social security, Medicare, and federal unemployment

taxes). No withholding applies to these payments.

Qualified disaster relief payments include payments

you receive (regardless of the source) for the following expenses.

• Reasonable and necessary personal, family, living, or

funeral expenses incurred as a result of a federally declared disaster.

• Reasonable and necessary expenses incurred for the

repair or rehabilitation of a personal residence due to

a federally declared disaster. (A personal residence

can be a rented residence or one you own.)

26

repair or replacement of the contents of a personal

residence due to a federally declared disaster.

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).

Note: For more information about East Palestine disaster relief payments, including frequently asked questions,

go to East Palestine train derailment frequently asked

questions.

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.

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,

• 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

Publication 547 (2025)

you were compensated by a qualified wildfire relief payment.

Table 3. When To Deduct a Casualty or Theft

Loss

Note: For more information about qualified wildfire relief payments, including frequently asked questions, go to

Wildfire relief payments frequently asked questions.

IF you have a loss...*

THEN deduct it in the...

from a casualty*

year the loss occurred.

in a federally declared

disaster area

disaster year or the year immediately

before the disaster year.

from a theft*

year the theft was discovered.

on a deposit treated as a

casualty

year a reasonable estimate can be

made.

Tip: If you did not exclude from your income certain

qualified wildfire relief payments or East Palestine disaster

relief payments you received, 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 for Form 4684 are available at IRS.gov/Form4684.

Qualified disaster mitigation payments. Qualified disaster mitigation payments made under the Stafford Act or

the National Flood Insurance Act (as in effect on April 15,

2005) aren’t included in income. These are payments you,

as a property owner, receive to reduce the risk of future

damage to your property. You can’t increase your basis in

the property, or take a deduction or credit, for expenditures made with respect to those payments.

Sale of property under hazard mitigation program.

Generally, if you sell or otherwise transfer property, you

must recognize any gain or loss for tax purposes unless

the property is your main home. You report the gain or deduct the loss on your tax return for the year you realize it.

(You can’t deduct a loss on personal-use property unless

the loss resulted from a casualty, as discussed earlier.)

However, if you sell or otherwise transfer property to the

federal government, a state or local government, or an Indian tribal government under a hazard mitigation program,

you can choose to postpone reporting the gain if you buy

qualifying replacement property within a certain period of

time. See Postponement of Gain, earlier, for the rules that

apply.

Gains. Special rules apply if you choose to postpone reporting gain on property damaged or destroyed in a federally declared disaster area. For these special rules, see

the following discussions.

• Main home in disaster area, earlier, under Replacement Property.

• Business or income-producing property located in a

federally declared disaster area, earlier, under Replacement Property.

* If you are an individual, casualty and theft losses of personal-use property

are deductible only if the loss is attributable to a federally declared disaster or

a transaction entered into for profit. An exception applies where you have

personal casualty gains.

Postponed Tax Deadlines

The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared

(or state-declared, as described below) disaster. The tax

deadlines the IRS may postpone include those for filing income, excise, and employment tax returns; paying income, excise, and employment taxes; and making contributions to a traditional IRA or Roth IRA.

Qualified state-declared disasters. The Filing Relief

for Natural Disasters Act expanded the mandatory postponement of certain tax deadlines for disasters declared

after July 24, 2025, by the governor of the impacted state.

This provision may also be applied to impacted areas

within the District of Columbia, Puerto Rico, the U.S. Virgin

Islands, Guam, American Samoa, or the Commonwealth

of the North Mariana Islands.

If any tax deadline is postponed, the IRS will publicize

the postponement in your area and publish a news release and, where necessary, in a revenue ruling, revenue

procedure, notice, announcement, or other guidance in

the Internal Revenue Bulletin (IRB). Go to IRS.gov/

DisasterTaxRelief to find out if a tax deadline has been

postponed for your area.

Who is eligible. If the IRS postpones a tax deadline, the

following taxpayers are eligible for the postponement.

• Any individual whose main home is located in a covered disaster area (defined later).

• Any business entity or sole proprietor whose principal

place of business is located in a covered disaster

area.

• Any individual who is a relief worker affiliated with a

recognized government or philanthropic organization

and who is assisting in a covered disaster area.

• Any individual, business entity, or sole proprietorship

whose records are needed to meet a postponed tax

deadline, provided those records are maintained in a

covered disaster area. The main home or principal

place of business doesn’t have to be located in the

covered disaster area.

Publication 547 (2025)

27

• Any estate or trust that has tax records necessary to

meet a postponed tax deadline, provided those records are maintained in a covered disaster area.

• The spouse on a joint return with a taxpayer who is eligible for postponements.

• Any individual, business entity, or sole proprietorship

not located in a covered disaster area but whose records necessary to meet a postponed tax deadline

are located in the covered disaster area.

• Any individual visiting the covered disaster area who

Personal-use property. If you have a loss, use both of

the following.

• Form 4684.

• Schedule A (Form 1040) (or Schedule A (Form

1040-NR), if you are a nonresident alien).

If you have a gain, report it on both of the following.

• Form 4684.

• Schedule D (Form 1040).

• Any other person determined by the IRS to be affected

Don’t report on these forms any gain you postpone. If

you choose to postpone gain, see How To Postpone a

Gain, earlier.

Covered disaster area. This is an area of a federally

declared or a state-declared disaster in which the IRS has

decided to postpone tax deadlines for up to 1 year.

Business and income-producing property. Use Form

4684 to report your gains and losses. You will also have to

report the gains and losses on other forms, as explained

next.

was killed or injured as a result of the disaster.

by a federally declared disaster.

Mandatory 120-day postponement. Certain taxpayers

affected by a federally declared or a state-declared disaster that occurs after July 24, 2025, may be eligible for a

mandatory 120-day postponement for certain tax deadlines such as filing or paying income, excise, and employment taxes; and making contributions to a traditional IRA

or Roth IRA.

The period beginning on the earliest incident date

specified in the disaster declaration and ending on the

date that is 120 days after either the earliest incident date

or the date of the declaration, whichever is later, is the period during which the deadlines are postponed.

For information about disaster relief available in your

area, including postponements, go to IRS News Around

the Nation.

Abatement of interest and penalties. The IRS may

abate the interest and penalties on underpaid income tax

for the length of any postponement of tax deadlines.

Contacting the Federal Emergency

Management Agency (FEMA)

You can get information from FEMA by visiting

DisasterAssistance.gov or calling the following phone

numbers.

• 800-621-3362.

• Dial 711 and provide the TRS operator the number

800-621-3362 if you are deaf, hard of hearing, or have

a speech disability.

How To Report Gains and

Losses

How you report gains and losses depends on whether the

property was business, income-producing, or personal-use property.

28

Property held 1 year or less. Individuals report losses from income-producing property on Schedule A (Form

1040). Gains from business and income-producing property are combined with losses from business property and

the net gain or loss is reported on Form 4797. If you aren’t

otherwise required to file Form 4797, only enter the net

gain or loss on your tax return on the line identified as from

Form 4797. For individuals filing Form 1040 or Form

1040-SR, enter the net gain or loss on Schedule 1 (Form

1040), line 4 and check the “4684” box. Partnerships and

S corporations should see the Instructions for Form 4684

to find out where to report these gains and losses.

Property held more than 1 year. If your losses from

business and income-producing property are more than

gains from these types of property, combine your losses

from business property with total gains from business and

income-producing property. Report the net gain or loss as

an ordinary gain or loss on Form 4797. If you aren’t otherwise required to file Form 4797, only enter the net gain or

loss on your tax return on the line identified as from Form

4797. For individuals filing Form 1040 or Form 1040-SR,

enter the net gain or loss on Schedule 1 (Form 1040),

line 4 and check the “4684” box. Individuals deduct any

loss of income-producing property on Schedule A (Form

1040). Partnerships and S corporations should see Form

4684 to find out where to report these gains and losses.

If losses from business and income-producing property

are less than or equal to gains from these types of property, report the net amount on Form 4797. You may also

have to report the gain on Schedule D (Form 1040) depending on whether you have other transactions. Partnerships and S corporations should see Form 4684 to find

out where to report these gains and losses.

Depreciable property. If the damaged or stolen property was depreciable property held more than 1 year, you

may have to treat all or part of the gain as ordinary income

to the extent of depreciation allowed or allowable. You figure the ordinary income part of the gain in Part III of Form

4797. See Depreciation Recapture in chapter 3 of Pub.

544 for more information about the recapture rule.

Publication 547 (2025)

Adjustments to Basis

If you have a casualty or theft loss, you must decrease

your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. The

result is your adjusted basis in the property.

If you make either of the basis adjustments described

above, amounts you spend on repairs that restore the

property to its pre-casualty condition increase your adjusted basis. Don’t increase your basis in the property by any

qualified disaster mitigation payments (discussed earlier

under Disaster Area Losses). See Adjusted Basis in Pub.

551 for more information on adjustments to basis.

If Deductions Are More Than Income

If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year,

you may have a net operating loss (NOL). Generally, you

can use an NOL to lower your tax in a later year. You don’t

have to be in business to have an NOL from a casualty or

theft loss. For more information, see the Instructions for

Form 172.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications,

forms, or instructions, go to IRS.gov to find resources that

can help you right away.

• VITA. The Volunteer Income Tax Assistance (VITA)

program offers free tax help to people with

low-to-moderate incomes, persons with disabilities,

and limited-English-speaking taxpayers who need

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) pro-

gram offers free tax help for all taxpayers, particularly

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.

Go to IRS.gov/TCE or download the free IRS2Go app

for information on free tax return preparation.

• MilTax. Members of the U.S. Armed Forces and quali-

fied veterans may use MilTax, a free tax service offered by the Department of Defense through Military

OneSource. For more information, go to

MilitaryOneSource (MilitaryOneSource.mil/MilTax).

Also, the IRS offers Free Fillable Forms, which can

be completed online and then e-filed regardless of income.

Using online tools to help prepare your return. Go to

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the

earned income credit (EITC).

• The Online EIN Application (IRS.gov/EIN) helps you

get an employer identification number (EIN) at no

cost.

Tax reform. Tax reform legislation impacting federal

taxes, credits, and deductions was enacted in P.L. 119-21,

commonly known as the One Big Beautiful Bill Act, on July

4, 2025. Go to IRS.gov/OBBB for more information and

updates on how this legislation affects your taxes.

• The Tax Withholding Estimator (IRS.gov/W4App)

Preparing and filing your tax return. After receiving all

your wage and earnings statements (Forms W-2, W-2G,

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment

compensation statements (by mail or in a digital format) or

other government payment statements (Form 1099-G);

and interest, dividend, and retirement statements from

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you

qualify for free tax preparation, or hire a tax professional to

prepare your return.

• The Sales Tax Deduction Calculator (IRS.gov/

Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

• Free File. This program lets you prepare and file your

federal individual income tax return for free using software or Free File Fillable Forms. However, state tax

preparation may not be available through Free File. Go

to IRS.gov/FreeFile to see if you qualify for free online

federal tax preparation, e-filing, and direct deposit or

payment options.

Publication 547 (2025)

makes it easier for you to estimate the federal income

tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

SalesTax) figures the amount you can claim if you

itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On

IRS.gov, you can get up-to-date information on

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that

will ask you questions and, based on your input, provide answers on a number of tax topics.

• IRS.gov/Forms: Find forms, instructions, and publica-

tions. You will find details on the most recent tax

changes and interactive links to help you find answers

to your questions.

• You may also be able to access tax information in your

e-filing software.

29

Need someone to prepare your tax return? There are

various types of tax return preparers, including enrolled

agents, certified public accountants (CPAs), accountants,

and many others who don’t have professional credentials.

If you choose to have someone prepare your tax return,

choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification

number (PTIN).

Although the tax preparer always signs the return,

you’re ultimately responsible for providing all the

CAUTION information required for the preparer to accurately

prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns

for others should have a thorough understanding of tax

matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

!

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure

W-2 filing options to CPAs, accountants, enrolled agents,

and individuals who process Form W-2, Wage and Tax

Statement; and Form W-2c, Corrected Wage and Tax

Statement.

Business tax account. If you are a sole proprietor, a

partnership, an S corporation, a C corporation, or a single-member limited liability company (LLC), you can view

your tax information on record with the IRS and do more

with a business tax account. Go to IRS.gov/

BusinessAccount for more information.

IRS social media. Go to IRS.gov/SocialMedia to see the

various social media tools the IRS uses to share the latest

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our

highest priority. We use these tools to share public information with you. Don’t post your social security number

(SSN) or other confidential information on social media

sites. Always protect your identity when using any social

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English

and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosASL.

Over-the-Phone Interpreter (OPI) Service. The IRS

offers the OPI Service to taxpayers needing language interpretation. The OPI Service is available at Taxpayer Assistance Centers (TACs), most IRS offices, and every

VITA/TCE tax return site. This service is available in Spanish, Mandarin, Cantonese, Korean, Vietnamese, Russian,

and Haitian Creole.

Accessibility Helpline available for taxpayers with

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and

future accessibility products and services available in alternative media formats (for example, braille-ready, large

print, audio, etc.). The Accessibility Helpline does not

have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/

LetUsHelp.

Alternative media preference. Form 9000, Alternative

Media Preference, or Form 9000(SP) allows you to elect to

receive certain types of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille-Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all the forms, instructions, and publications you may need. Or you can go to

IRS.gov/OrderForms to place an order.

Mobile-friendly forms. You’ll need an IRS Online Account (OLA) to complete mobile-friendly forms that require

signatures. You’ll have the option to submit your form(s)

online or download a copy for mailing. You’ll need scans of

your documents to support your submission. Go to

IRS.gov/MobileFriendlyForms for more information.

Getting tax publications and instructions in eBook

format. Download and view most tax publications and

instructions (including the Instructions for Form 1040) on

mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple’s iBooks for

iPad. Our eBooks haven’t been tested on other dedicated

eBook readers, and eBook functionality may not operate

as intended.

Access your online account (individual taxpayers

only). Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax

year.

• See payment plan details or apply for a new payment

plan.

• Make a payment or view 5 years of payment history

and any pending or scheduled payments.

• Access your tax records, including key data from your

most recent tax return, and transcripts.

• View digital copies of select notices from the IRS.

30

Publication 547 (2025)

• Approve or reject authorization requests from tax professionals.

Get a transcript of your return. With an online account, you can access a variety of information to help you

during the filing season. You can get a transcript, review

your most recently filed tax return, and get your adjusted

gross income. Create or access your online account at

IRS.gov/Account.

Tax Pro Account. This tool lets your tax professional

submit an authorization request to access your individual

taxpayer IRS OLA. For more information, go to IRS.gov/

TaxProAccount.

Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit,

which securely and electronically transfers your refund directly into your financial account. Direct deposit also

avoids the possibility that your check could be lost, stolen,

destroyed, or returned undeliverable to the IRS. Eight in

10 taxpayers use direct deposit to receive their refunds. If

you don’t have a bank account, go to IRS.gov/

DirectDeposit for more information on where to find a bank

or credit union that can open an account online.

The IRS can’t issue refunds before mid-February

for returns that claimed the EITC or the additional

CAUTION child tax credit (ACTC). This applies to the entire

refund, not just the portion associated with these credits.

!

Making a tax payment. The IRS recommends paying

electronically whenever possible. Options to pay electronically are included in the list below. Payments of U.S. tax

must be remitted to the IRS in U.S. dollars. Digital assets

are not accepted. Go to IRS.gov/Payments for information

on how to make a payment using any of the following options.

• IRS Direct Pay: Pay taxes from your bank account. It’s

free and secure, and no sign-in is required. You can

change or cancel within 2 days of scheduled payment.

• Debit Card, Credit Card, or Digital Wallet: Choose an

approved payment processor to pay online or by

phone.

• Electronic Funds Withdrawal: Schedule a payment

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: This is the

best option for businesses. Enrollment is required.

Reporting and resolving your tax-related identity

theft issues.

• Check or Money Order: Mail your payment to the ad-

• Tax-related identity theft happens when someone

• Cash: You may be able to pay your taxes with cash at

steals your personal information to commit tax fraud.

Your taxes can be affected if your SSN is used to file a

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by

email, text messages (including shortened links), telephone calls, or social media channels to request or

verify personal or financial information. This includes

requests for personal identification numbers (PINs),

passwords, or similar information for credit cards,

banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft

Central webpage, for information on identity theft and

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or

stolen or you suspect you’re a victim of tax-related

identity theft, you can learn what steps you should

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your

SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund.

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile device to check your refund status.

dress listed on the notice or instructions.

a participating retail store.

• Same-Day Wire: You may be

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