Instructions for Form 4684

2025

Instructions for Form 4684

Casualties and Thefts

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 4684 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form4684.

What’s New

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

Pub. 547, Casualties, Disasters, and Thefts.

Extended disaster tax relief benefits. P.L. 119-21,

commonly known as the One Big Beautiful Bill Act,

extended the special rules and return procedures for

personal casualty losses attributable to certain major

federal disasters declared between January 1, 2020, and

September 2, 2025. Qualified disaster losses can be

claimed on Form 4684. For more information, see

Qualified disaster losses.

Losses from financial scams. If you were a victim of a

financial scam involving a transaction entered into for

profit, you may be able to claim a theft loss deduction. For

more information, see Losses From Financial Scams.

Reminders

Qualified wildfire relief payments. Certain relief

payments received between 2020 and 2025 following a

wildfire disaster are not taxable. For more information on

income you may exclude and how to file an amended

return for an earlier tax year, see Qualified wildfire relief

payments, later.

East Palestine disaster relief payments. Certain relief

payments for the train derailment in East Palestine, Ohio,

on February 3, 2023, are not taxable. For more information

on payments that may be excluded and how to file an

amended return for an earlier tax year, see East Palestine

disaster relief payments, later.

How to report the loss on Form 1040-X. You should

adjust your deductions on Form 1040-X. The Instructions

Dec 19, 2025

for Form 1040-X show how to do this. Explain the reasons

for your adjustment and attach Form 4684 to show how

you figured your loss. See Figuring a Loss in Pub. 547.

If the damaged or destroyed property was nonbusiness

property and you didn’t itemize your deductions on your

original return, you must first determine whether the

casualty loss deduction now makes it advantageous for

you to itemize. It is advantageous to itemize if the total of

the casualty loss deduction and any other itemized

deductions is more than your standard deduction (and

increased standard deduction amount, if applicable). If

you itemize, attach Schedule A (Form 1040) or

Schedule A (Form 1040-NR), and Form 4684 to your

amended return. Fill out Form 1040-X to refigure your tax

to find your refund.

Special rules and return procedures expanded for

claiming qualified disaster-related personal casualty

losses. The Taxpayer Certainty and Disaster Tax Relief

Act of 2019, the Taxpayer Certainty and Disaster Tax

Relief Act of 2020, and the Federal Disaster Tax Relief Act

of 2023 expanded the special rules and return procedures

for personal casualty losses attributable to certain major

federal disasters that were declared between 2018 and

February 10, 2025.

Qualified disaster losses in those tax years may be

claimed on Form 4684. See Qualified disaster loss, later,

for more information.

Tip: If applicable, you may have to file an amended return

on Form 1040-X to claim these benefits for a prior-year

return. Form 1040-X is available at IRS.gov/Form1040X.

Prior revisions of Form 4684 are available at IRS.gov/

Form4684.

Limitation on personal casualty and theft losses. For

tax years beginning after 2017, if you are an individual,

casualty or theft losses of personal-use property not

connected with a trade or business or a transaction

entered into for profit are deductible only if the loss is

attributable to a federally declared disaster. Theft losses

incurred in a transaction entered into for profit may be

deductible.

Personal casualty and theft losses attributable to a

federally declared disaster are subject to the $100 per

casualty and 10% of your adjusted gross income (AGI)

reductions unless they are attributable to a qualified

disaster loss.

Personal casualty and theft losses attributable to a

qualified disaster loss are not subject to the 10% of the

AGI reduction and the $100 reduction is increased to

$500.

An exception to the rule above limiting the personal

casualty and theft loss deduction to losses attributable to

a federally declared disaster applies if you have personal

Instructions for Form 4684 (2025) Catalog Number 12998Z

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

casualty gains for the tax year. In this case, you will reduce

your personal casualty gains by any casualty losses not

attributable to a federally declared disaster. Any excess

gain is used to reduce losses from a federally declared

disaster.

For more information, see Disaster Losses, later, the

instructions for line 14, and Pub. 547.

Federal Emergency Management Agency (FEMA)

disaster declaration numbers. If you are reporting a

casualty or theft loss attributable to a federally declared

disaster, check the box and enter the DR or EM

declaration number assigned by FEMA in the space

provided above line 1 on your 2025 Form 4684. For

additional information, see FEMA disaster declaration

numbers, later.

AMT adjustment for standard deduction made retroactively inapplicable to net qualified disaster losses.

The AMT adjustment for the standard deduction doesn’t

apply to the increase in the standard deduction that is

attributable to a net disaster loss. See Taxpayers who also

file the 2025 Form 6251, Alternative Minimum Tax for

Individuals, later, for more information.

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 Form 8949 for how to make the election. You

will need to attach Form 8997 annually until you dispose

of the QOF investment. See the Form 8997 instructions for

more information.

General Instructions

Purpose of Form

Use Form 4684 to report gains and losses from casualties

and thefts. Attach Form 4684 to your tax return.

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Definitions

Three types of casualty losses are described in these

instructions.

1. Federal Casualty Losses.

2. Disaster Losses.

3. Qualified Disaster Losses.

All three types of losses refer to federally declared

disasters, but the requirements for each loss vary. A

federally declared disaster is a disaster determined by the

President of the United States to warrant assistance by

the federal government under the Robert T. Stafford

Disaster Relief and Emergency Assistance Act (Stafford

Act). A federally declared disaster includes (a) a major

disaster declaration or (b) an emergency declaration

under the Stafford Act.

Federal casualty loss. A federal casualty loss is an

individual’s casualty or theft loss of personal-use property

that is attributable to a federally declared disaster. The

casualty loss must occur in a state receiving a federal

disaster declaration. If you suffered a federal casualty

loss, you are eligible to claim a casualty loss deduction. If

you suffered a casualty or theft loss of personal-use

property that was not attributable to a federally declared

disaster, it is not a federal casualty loss, and you may not

claim a casualty loss deduction unless the exception

applies. Theft losses incurred in a transaction entered into

for profit may still be deductible. See the Caution under

Losses You Can Deduct, later.

Disaster loss. A disaster loss is a loss that is attributable

to a federally declared disaster and that occurs in an area

eligible for assistance pursuant to the Presidential

declaration. The disaster loss must occur in a county

eligible for public or individual assistance (or both).

Disaster losses are not limited to individual personal-use

property and may be claimed for individual business or

income-producing property and by corporations, S

corporations, and partnerships. If you suffered a disaster

loss, you are eligible to claim a casualty loss deduction

and to elect to claim the loss in the preceding tax year.

See Disaster Losses, later.

Qualified disaster loss. A qualified disaster loss

includes an individual’s casualty or theft loss of

personal-use property that is attributable to:

• A major disaster declared by the President under

section 401 of the Stafford Act in 2016;

• Hurricane Harvey;

• Tropical Storm Harvey;

• Hurricane Irma;

• Hurricane Maria;

• The California wildfires in 2017 and January 2018;

• A major disaster that was declared by the President

under section 401 of the Stafford Act and that

occurred in 2018 and before December 21, 2019, and

continued no later than January 19, 2020 (except

those attributable to the California wildfires in January

2018 that received prior relief); and

• A major disaster that was declared by the President

during the period between January 1, 2020, and

September 2, 2025. Also, this disaster must have an

Instructions for Form 4684 (2025)

incident period that began on or after December 28,

2019, and on or before July 4, 2025, and must have

ended no later than August 3, 2025.

Note: The definition of a qualified disaster loss does not

extend to any major disaster that has been declared only

by reason of COVID-19.

If you suffered a qualified disaster loss, you are eligible

to claim a casualty loss deduction, to elect to claim the

loss in the preceding tax year, and to deduct the loss

without itemizing other deductions on Schedule A (Form

1040). See Qualified disaster losses and Increased

standard deduction reporting, later.

Go to IRS.gov/DisasterTaxRelief for date-specific

declarations associated with these disasters and for more

information.

Losses You Can Deduct

For tax years beginning after 2017, if you are an individual,

losses of personal-use property from fire, storm,

shipwreck, or other casualty, or theft are deductible only if

the loss is attributable to a federally declared disaster

(federal casualty loss). See Pub. 547 for more information.

If the event causing you to suffer a personal casualty

loss occurred before January 1, 2018, but the casualty

loss was not sustained until January 1, 2018, or later, the

casualty loss is not deductible. See When To Deduct a

Loss, later, for more information on when a casualty loss is

sustained.

Caution: An exception to the rule limiting the deduction

for personal casualty and theft losses to federal casualty

losses applies where you have personal casualty gains to

the extent the losses don’t exceed your gains.

If your property is covered by insurance, and your loss

is otherwise deductible, you should file a timely insurance

claim for reimbursement of your loss. If you don’t file a

timely insurance claim, you can’t deduct the full

unrecovered amount as a casualty or theft loss and only

the part of the loss that isn’t covered by your insurance

policy is deductible.

Related expenses. The related expenses you have due

to a casualty or theft, such as expenses for the treatment

of personal injuries or for the rental of a car, aren’t

deductible as casualty or theft losses.

Costs for protection against future casualties aren’t

deductible but should be capitalized as permanent

improvements. An example would be the cost of a levee to

stop flooding.

Losses You Can’t Deduct

• Money or property misplaced or lost.

• Breakage of china, glassware, furniture, and similar

items under normal conditions.

• Progressive damage to property (buildings, clothes,

trees, etc.) caused by termites, moths, other insects,

or disease.

• A decline in market value of stock, caused by

disclosure of accounting or other illegal misconduct by

the officers or directors of the corporation that issues

the stock, that was acquired on the open market for

investment. You may be able to deduct it as a capital

Instructions for Form 4684 (2025)

loss on Schedule D (Form 1040) if the stock is sold or

exchanged or becomes completely worthless. See

chapter 4 of Pub. 550, Investment Income and

Expenses.

Note: Victims of scams and fraudulent investment

schemes may be eligible to claim a theft loss deduction if

certain conditions apply. See Losses From Financial

Scams and Losses From Ponzi-Type Investment

Schemes, later, for more information.

Gain on Reimbursement

If the amount you receive in insurance or other

reimbursement is more than the cost or other basis of the

property, you have a gain. If you have a gain, you may

have to pay tax on it or you may be able to postpone the

gain.

Don’t report the gain on damaged, destroyed, or stolen

property if you receive property that is similar or related to

it in service or use. Your basis in the new property is the

same as your basis in the old property.

Any tangible replacement property held for use in a

trade or business is treated as similar or related in service

or use to property held for use in a trade or business or for

investment if:

• The property you are replacing was damaged or

destroyed in a disaster, and

• The area in which the property was damaged or

destroyed was declared by the President of the United

States to warrant federal assistance because of that

disaster.

Generally, you must recognize the gain if you receive

unlike property or money as reimbursement. But you can

generally choose to postpone all or part of the gain if,

within 2 years of the end of the first tax year in which any

part of the gain is realized, you purchase:

• Property similar or related in service or use to the

damaged, destroyed, or stolen property; or

• A controlling interest (at least 80%) in a corporation

owning such property.

To postpone all of the gain, the cost of the replacement

property must be equal to or more than the reimbursement

you received for your property. If the cost of the

replacement property is less than the reimbursement

received, you must recognize the gain to the extent the

reimbursement exceeds the cost of the replacement

property.

If the replacement property or stock is acquired from a

related person, gain generally can’t be postponed by:

• Corporations (other than S corporations);

• Partnerships in which more than 50% of the capital or

profits interest is owned by corporations (other than S

corporations); or

• All other taxpayers, unless the aggregate realized

gains on the involuntarily converted property are

$100,000 or less for the tax year. This rule applies to

partnerships and S corporations at both the entity and

partner or shareholder level.

For details on how to postpone the gain, see Pub. 547.

If your main home was located in a disaster area and

that home or any of its contents were damaged or

3

destroyed due to the disaster, special rules apply. See

Gains Realized on Homes in Disaster Areas, later.

When To Deduct a Loss

Generally, you can deduct the part of your casualty or theft

loss that isn’t reimbursable in the tax year the casualty

occurred or the theft was discovered. However, a disaster

loss and a loss from deposits in insolvent or bankrupt

financial institutions may be treated differently. See

Disaster Losses and Special Treatment for Losses on

Deposits in Insolvent or Bankrupt Financial Institutions,

later.

If in the year of the casualty there is a claim for

reimbursement with a reasonable prospect of recovery,

the loss is not sustained until you know with reasonable

certainty whether such reimbursement will be received. If

you aren’t sure whether part of your casualty or theft loss

will be reimbursed, don’t deduct that part until the tax year

when you become reasonably certain that it won’t be

reimbursed. This later tax year is when your loss is

sustained.

If you are reimbursed for a loss you deducted in an

earlier year, include the reimbursement in your income in

the year you received it, but only to the extent the

deduction reduced your tax in an earlier year.

See Lessee’s loss in Pub. 547 for special rules on when

to deduct losses from casualties and thefts to leased

property.

Disaster Losses

A disaster loss is a loss that occurred in an area

determined by the President of the United States to

warrant federal disaster assistance and that is attributable

to a federally declared disaster. It includes a major

disaster or emergency declaration.

Tip: For a list of federally declared disasters and disaster

areas, go to FEMA.gov/Disaster.

To determine the amount to deduct for a disaster loss,

you must take into account as reimbursements any

benefits you received or which you have a reasonable

possibility of receiving from federal or state programs to

restore your property.

Disaster year. The disaster year is the tax year in which

you sustained the loss attributable to a federally declared

disaster. Generally, a disaster loss is sustained in the year

the disaster occurred. However, a disaster loss may also

be sustained in a year after the disaster occurred. For

example, if a claim for reimbursement exists for which

there is a reasonable prospect of recovery, no part of the

loss for which reimbursement may be received is

sustained until it can be ascertained with reasonable

certainty whether you will be reimbursed.

Example. In December 2024, your car was destroyed

in severe flooding that occurred in the area where you live.

The area where you lived was designated by FEMA to be

eligible for public or individual assistance (or both). You

immediately filed a claim for reimbursement with your

insurance company. There was a reasonable prospect

that you would recover the full amount of your loss. The

claim was settled in January 2025 when your insurance

4

company reimbursed you for only half of your loss. The

disaster year is 2025 (not 2024 when the loss occurred).

Your loss was sustained in 2025 because that’s when it

became reasonably certain whether you would be

reimbursed. You can either deduct the unreimbursed loss

on your tax return for the disaster year (2025) or make an

election to deduct the unreimbursed loss on your tax

return for the preceding year (2024).

Caution: If you realize a gain from the reimbursement on

your casualty loss, do not report the gain until the year in

which that amount is received.

Election to deduct loss in the preceding year. If you

have a casualty loss from a federally declared disaster

that occurred in an area warranting public or individual

assistance (or both), you can elect to deduct the loss in

the tax year immediately before the disaster year. A list of

areas warranting public or individual assistance (or both)

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

To make this election for a loss in disaster year 2025,

complete Part I of Section D on your 2024 Form 4684 and

attach it to your 2024 original or amended return that

claims the disaster loss. See Section D—Election To

Deduct Federally Declared Disaster Loss in Preceding Tax

Year, later.

You must make an election to deduct a 2025 disaster

loss on your 2024 return on or before the date that is 6

months after the regular due date for filing your original

return (without extensions) for the disaster year. For

calendar year individual taxpayers, the deadline for

electing to take a 2025 disaster loss on your 2024 tax

return is October 15, 2026.

Revoking a prior election to deduct loss in the

preceding year. Complete Part II of Section D if you want

to revoke a 2024 disaster year election to deduct a

federally declared disaster loss in the preceding tax year.

Attach the completed Section D to an amended return for

the preceding year (that is, to an amended 2024 return for

the revocation of a 2025 disaster year election). See

Section D—Election To Deduct Federally Declared

Disaster Loss in Preceding Tax Year, later.

Your amended return revoking the election must be

filed on or before the date that is 90 days after the due

date for making the election and on or before the date you

file any return or amended return for the year that includes

the disaster loss.

Your amended return should refigure your tax liability as

a result of revoking the election. You must pay or make

arrangements to pay any tax and interest due as a result

of the revocation.

Home made unsafe by disaster. If your home was

located in a disaster area and your state or local

government ordered you to tear it down or move it

because it was no longer safe to use as a home due to the

disaster, the resulting loss in value is treated as a disaster

loss. The order for you to tear down or move the home

must have been issued within 120 days after the area was

officially declared a disaster area.

For purposes of figuring the disaster loss, use the value

of your home before you moved it or tore it down as its fair

market value after the casualty.

Instructions for Form 4684 (2025)

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, to elect to claim the

loss in the preceding tax year, and to deduct the loss

without itemizing other deductions on Schedule A (Form

1040).

For specific instructions for reporting these qualified

disaster losses, see Line 11 and Line 15, later. Go to

IRS.gov/DisasterTaxRelief for date-specific declarations

associated with these disasters and for more information.

Note: You can deduct qualified disaster losses without

itemizing other deductions on Schedule A. Moreover, your

net casualty loss from these qualified disasters doesn’t

need to exceed 10% of your adjusted gross income (AGI)

to qualify for the deduction, but the $100 limit per casualty

is increased to $500. See Increased standard deduction

reporting next for more information.

Increased standard deduction reporting. If you have a

net qualified disaster loss and aren’t itemizing your

deductions, you can claim an increased standard

deduction using Schedule A (Form 1040) or Schedule A

(Form 1040-NR), by doing the following.

1. Enter the amount from Form 4684, line 15, on the

dotted line next to line 16 on Schedule A (Form 1040),

or line 7 of Schedule A (Form 1040-NR), and the

description “Net Qualified Disaster Loss.”

2. Also, enter on the dotted line next to line 16 of

Schedule A (Form 1040) or line 7 of Schedule A

(Form 1040-NR), your standard deduction amount

and the description “Standard Deduction Claimed

With Qualified Disaster Loss.”

3. Combine these two amounts and enter the total in the

entry space on line 16 of Schedule A (Form 1040), or

line 7 of Schedule A (Form 1040-NR), and on Form

Instructions for Form 4684 (2025)

1040 or Form 1040-SR, line 12e, or Form 1040-NR,

line 12.

Caution: Nonresident aliens cannot claim the standard

deduction. However, there is an exception. Students or

business apprentices, who file Form 1040-NR, may be

able to take a standard deduction if they are eligible for

benefits under Article 21(2) of the United States-India

Income Tax Treaty. They will enter the standard deduction

amount found for their filing status on Form 1040 or

1040-SR. See chapter 5 of Pub. 519 and the Instructions

for Form 1040-NR for details.

Caution: The alternative minimum tax adjustment for the

standard deduction is made retroactively inapplicable to

net qualified disaster losses. See Taxpayers who also file

the 2025 Form 6251, Alternative Minimum Tax for

Individuals, later, for more information.

More information. See Pub. 547 for more information

about disaster losses.

Gains Realized on Homes in Disaster

Areas

The following rules apply if your main home was located in

an area declared by the President of the United States to

warrant federal assistance as the result of a disaster, and

the home or any of its contents were damaged or

destroyed due to the disaster. These rules also apply to

renters who receive insurance proceeds for damaged or

destroyed property in a rented home that is their main

home.

1. No gain is recognized on any insurance proceeds

received for unscheduled personal property that was

part of the contents of the home.

2. Any other insurance proceeds you receive for the

home or its contents are treated as received for a

single item of property, and any replacement property

you purchase that is similar or related in service or

use to the home or its contents is treated as similar or

related in service or use to that single item of property.

Therefore, you can choose to recognize gain only to

the extent the insurance proceeds treated as received

for that single item of property exceed the cost of the

replacement property.

3. If you choose to postpone any gain from the receipt of

insurance or other reimbursement for your main home

or any of its contents, the period in which you must

purchase replacement property is extended until 4

years after the end of the first tax year in which any

part of the gain is realized.

For details on how to postpone gain, see Pub. 547.

Example. Your main home and its contents were

completely destroyed in 2025 by a tornado in a federally

declared disaster area. In 2025, you received insurance

proceeds of $200,000 for the home, $25,000 for

unscheduled personal property in your home, $5,000 for

jewelry, and $10,000 for a stamp collection.

No gain is recognized on the $25,000 of insurance

proceeds you received for the unscheduled personal

property.

5

The jewelry and stamp collection were kept in your

home and were scheduled property on your insurance

policy. Your home and its replacement contents are

considered a single item of property for the purpose of

recognizing gain on the involuntary conversion of your

home and its contents.

If you reinvest $215,000 in a replacement home and its

replacement contents, you can elect to postpone any gain

on your home, jewelry, or stamp collection.

If you reinvest less than the remaining $215,000 of

insurance proceeds in a replacement home and its

replacement contents, you may have to recognize any

gain to the extent the $215,000 of insurance proceeds

exceeds the amount you invest in a replacement home

and its replacement contents.

See Pub. 523, Selling Your Home, for more information

on gain that may be excluded on a sale, including the

receipt of insurance proceeds for a destruction of your

home. Also see Pub. 547 for more information on rules for

postponing gain, including rules for when the main home

is located in a disaster area.

To postpone the gain, you must purchase the

replacement property before 2030. Your basis in the

replacement property equals its cost decreased by the

amount of any postponed gain.

Other Disaster Issues

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.

6

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

you were compensated by a qualified wildfire relief

payment.

Note: For more information about qualified wildfire

disaster relief payments, including frequently asked

questions, go to Wildfire relief payments frequently asked

questions.

Tip: If you did not exclude from your income certain

qualified wildfire relief payments or East Palestine disaster

relief payments, you may need to file an amended return

on Form 1040-X to claim these benefits. Form 1040-X is

available at IRS.gov/Form1040X. Prior revisions of Form

4684 are available at IRS.gov/Form4684.

Special Treatment for Losses on

Deposits in Insolvent or Bankrupt

Financial Institutions

Caution: You can no longer claim a loss on a deposit in

an insolvent or bankrupt financial institution as a personal

casualty or theft loss unless the exception mentioned

under the Caution under Losses You Can Deduct, earlier,

applies. See Pub. 547 for more information.

Damage From Corrosive Drywall

If you suffered property losses due to the effects of certain

imported drywall installed in homes between 2001 and

2009, under a special procedure, you may be able to

claim a casualty loss deduction for amounts you paid to

repair damage to your home and household appliances

that resulted from corrosive drywall. For details, see

Special Procedure for Damage From Corrosive Drywall

under Casualty in Pub. 547.

Caution: Because the personal casualty losses claimed

under this special procedure are not attributable to a

federally declared disaster, they’re only deductible to the

extent such losses don’t exceed your personal casualty

gains.

Specific Instructions

Which Sections To Complete

Use Section A to figure casualty or theft gains and losses

for property that isn’t used in a trade or business or for

income-producing purposes. Also use Section A to figure

casualty or theft losses and gains related to the portion of

your home used for business if you used the simplified

method to determine your deductible expenses for

business use of your home.

Instructions for Form 4684 (2025)

Use Section B to figure casualty or theft gains and

losses for property that is used in a trade or business or

for income-producing purposes.

If property is used partly in a trade or business and

partly for personal purposes, such as a personal home

with a rental unit, figure the personal part in Section A and

the business part in Section B.

Use Section C to figure a theft loss deduction from a

Ponzi-type investment scheme if you qualify to use

Revenue Procedure 2009-20, as modified by Revenue

Procedure 2011-58, and choose to follow the procedures

in the guidance. Section C of Form 4684 replaces

Appendix A in Revenue Procedure 2009-20. You don’t

need to complete Appendix A. See Losses From

Ponzi-Type Investment Schemes, later.

Use Section D to elect (or revoke an election) to deduct

in the immediately preceding tax year a loss that was

attributable to a federally declared disaster and occurred

in a federally declared disaster area.

Section A—Personal-Use Property

Use a separate column for lines 2 through 9 to show each

item lost or damaged from a single casualty or theft

described on line 1. If more than four items were lost or

damaged, use additional sheets following the format of

lines 1 through 9.

Use a separate Form 4684 through line 12 for each

casualty or theft involving property not used in a trade or

business or for income-producing purposes. For example,

use a separate Form 4684 through line 12 for property lost

or damaged due to any qualified disaster described in

Qualified disaster loss, earlier.

Don’t include any loss previously deducted on an

estate tax return.

If you are liable for casualty or theft losses to property

you lease from someone else, see Leased property under

Figuring a Loss in Pub. 547.

FEMA disaster declaration numbers. If you are

reporting a casualty or theft loss attributable to a federally

declared disaster, check the box and enter the DR or EM

declaration number assigned by FEMA in the space

provided above line 1 on your 2025 Form 4684. A list of

federally declared disasters and FEMA disaster

declaration numbers is available at FEMA.gov/Disaster.

The FEMA disaster declaration number consists of the

letters “DR” and four numbers or the letters “EM” and four

numbers. For example, enter “DR-4865” in the respective

entry spaces for the Arkansas Severe Storms and

Tornadoes.

Line 1

Describe the type of property (for example, furniture,

jewelry, car, etc.). If you are reporting a loss attributable to

a federally declared disaster, and you checked the box

and entered the FEMA disaster declaration number in the

space provided above line 1, enter the ZIP code for the

property most affected on the line for Property A.

Instructions for Form 4684 (2025)

Line 2

Cost or other basis usually means original cost plus

improvements. Subtract any postponed gain from the sale

of a previous main home. Special rules apply to property

received as a gift or inheritance. See Basis Other Than

Cost in Pub. 551 for details. If you inherited the property

from someone who died in 2010 and the executor of the

decedent’s estate made the election to file Form 8939,

Allocation of Increase in Basis for Property Received From

a Decedent, refer to the information provided by the

executor or see Pub. 4895, Tax Treatment of Property

Acquired From a Decedent Dying in 2010, available at

IRS.gov/Pub/IRS-Prior/p4895--2011.pdf.

Line 3

Enter on this line the amount of insurance or other

reimbursement you received or expect to receive for each

property. Include your insurance coverage whether or not

you are filing a claim for reimbursement. For example,

your car worth $2,000 is totally destroyed in a flood in an

area designated as a federal disaster. You are insured with

a $500 deductible, but decide not to report it to your

insurance company because you are afraid the insurance

company will cancel your policy. In this case, enter $1,500

on this line.

If you expect to be reimbursed but haven’t yet received

payment, you must still enter the expected reimbursement

from the loss. If, in a later tax year, you determine with

reasonable certainty that you won’t be reimbursed for all

or part of the loss, you can deduct for that year the amount

of the loss that isn’t reimbursed.

Types of reimbursements. Insurance is the most

common way to be reimbursed for a casualty or theft loss,

but if:

• Part of a federal disaster loan is forgiven, the part you

don’t have to pay back is considered a

reimbursement;

• The person who leases your property must make

repairs or must repay you for any part of a loss, the

repayment and the cost of the repairs are considered

reimbursements;

• A court awards you damages for a casualty or theft

loss, the amount you are able to collect, minus

lawyers’ fees and other necessary expenses, is a

reimbursement;

• You accept repairs, restoration, or cleanup services

provided by relief agencies, it is considered a

reimbursement; or

• A bonding company pays you for a theft loss, the

payment is also considered a reimbursement.

Lump-sum reimbursement. If you have a casualty or

theft loss of several assets at the same time and you

receive a lump-sum reimbursement, you must divide the

amount you receive among the assets according to the

fair market value of each asset at the time of the loss.

Grants, gifts, and other payments. Grants and other

payments you receive to help you after a casualty are

considered reimbursements only if they must be used

specifically to repair or replace your property. Such

7

payments will reduce your casualty loss deduction. If there

are no conditions on how you have to use the money you

receive, it isn’t a reimbursement.

Use and occupancy insurance. If insurance reimburses

you for your loss of business income, it doesn’t reduce

your casualty or theft loss. The reimbursement is income

and is taxed in the same manner as your business

income.

Main home destroyed. If you have a gain because your

main home was destroyed, you can generally exclude the

gain from your income as if you had sold or exchanged

your home. You may be able to exclude up to $250,000 of

the gain (up to $500,000 if married filing jointly). To

exclude a gain, you must generally have owned and lived

in the property as your main home for at least 2 years

during the 5-year period ending on the date it was

destroyed. For information on this exclusion, see Pub.

523.

If you exclude the gain and the entire gain is

excludable, don’t report the casualty on Form 4684. If the

gain is more than you can exclude, reduce the insurance

or other reimbursement by the amount of the exclusion

and enter the result on line 3. Attach a statement showing

the full amount of insurance or other reimbursement and

the amount of the exclusion. You may be able to postpone

reporting the excess gain if you buy replacement property.

See Gain on Reimbursement and Gains Realized on

Homes in Disaster Areas, earlier.

Line 4

If you are entitled to an insurance payment or other

reimbursement for any part of a casualty or theft loss but

you choose not to file a claim for the loss, you can’t realize

a gain from that payment or reimbursement. Therefore,

figure the gain on line 4 by subtracting your cost or other

basis in the property (line 2) only from the amount of

reimbursement you actually received. Enter the result on

line 4, but don’t enter less than zero.

If you filed a claim for reimbursement but didn’t receive

it until after the year of the casualty or theft, include the

gain in your income in the year you received the

reimbursement.

Lines 5 and 6

Fair market value (FMV) is the price at which the property

would be sold between a willing buyer and a willing seller,

each having knowledge of the relevant facts. The

difference between the FMV immediately before the

casualty or theft and the FMV immediately after

represents the decrease in FMV because of the casualty

or theft.

occurrence, and the methods of determining FMV are

important elements in proving your loss.

The appraised value of property immediately after the

casualty must be adjusted (increased) for the effects of

any general market decline that may occur at the same

time as the casualty or theft. For example, the value of all

nearby property may become depressed because it is in

an area where such occurrences are commonplace. This

general decline in market value isn’t part of the property’s

decrease in FMV as a result of the casualty or theft.

Replacement cost or the cost of repairs isn’t

necessarily FMV. However, you may be able to use the

cost of repairs to the damaged property as evidence of

loss in value if:

• The repairs are actually made;

• The repairs are necessary to restore the property to

the condition it was in immediately before the

casualty;

• The amount spent for repairs isn’t excessive;

• The repairs only correct the damage caused by the

casualty; and

• The value of the property after the repairs isn’t, as a

result of the repairs, more than the value of the

property immediately before the casualty.

To figure a casualty loss to real estate not used in a

trade or business, or for income-producing purposes,

measure the decrease in value of the property as a whole.

All improvements, such as buildings, trees, and shrubs,

are considered together as one item. Figure the loss

separately for other items. For example, figure the loss

separately for each piece of furniture.

Safe harbor methods for determining casualty and

theft losses. See Revenue Procedure 2018-08, 2018-2

I.R.B. 286, available at IRS.gov/IRB/2018-02_IRB, for safe

harbor methods that you may use in determining the

amount of your casualty and theft losses for your home

and personal belongings.

Safe harbor reporting requirements for Form 4684.

If you use one of the safe harbor methods provided in

Revenue Procedure 2018-08, you must attach a

statement to Form 4684 stating that you used Revenue

Procedure 2018-08 to determine the amount of your

casualty loss. Include the specific safe harbor method

used. When completing Form 4684, do not enter an

amount on line 5 or line 6 for each property. Instead, enter

the decrease in the FMV determined in the relevant safe

harbor method on line 7.

Line 11

The FMV of property after a theft is zero if the property

isn’t recovered.

If you sustained a qualified disaster loss, including those

sustained in 2025, add the amounts on line 4 of all Forms

4684. Compare the sum with the amount on line 10. If the

amount on line 10 is larger, enter $500 on line 11 of the

Form 4684 reporting the qualified disaster losses.

FMV is generally determined by a competent appraisal.

The appraiser’s knowledge of sales of comparable

property about the same time as the casualty or theft,

knowledge of your property before and after the

If the amount on line 10 is smaller, or if you are

reporting a disaster loss, enter $100 and complete the

remainder of the form without applying the special rules

for qualified disaster losses.

8

Instructions for Form 4684 (2025)

Line 13

Enter on this line the amounts from line 4 of all Forms

4684 reporting a gain.

Line 14

Note: An exception to the rule that disallows a deduction

for personal casualty and theft losses other than those

attributable to federally declared disasters applies if you

have personal casualty gains reported on line 13 of your

Form 4684. You will deduct the portion of your personal

casualty losses not attributable to a federally declared

disaster to the extent the loss doesn’t exceed your

personal casualty gains. Any remaining personal casualty

gains will be used to reduce the amount of your deductible

federal casualty losses.

If you have personal casualty losses that are not

attributable to a federally declared disaster, such as those

described above, use Worksheet 1-1 to calculate the

amount you should enter on line 14. Otherwise, add the

amounts on line 12 of all Forms 4684 and enter that total

on line 14.

Worksheet 1-1. Losses Not Attributable to a

Federally Declared Disaster—Line 14

1. Add the amounts from line 12 of all

Forms 4684 reporting losses not

attributable to a federally declared

disaster . . . . . . . . . . . . . . . . . . . . . . 1.

2. Add the amounts from line 12 of all

Forms 4684 reporting losses

attributable to a federally declared

disaster. . . . . . . . . . . . . . . . . . . . . . 2.

3. Enter the smaller of line 1 or line 13 of

Form 4684 . . . . . . . . . . . . . . . . . . . . 3.

4. Add lines 2 and 3. Enter the result

here and on Form 4684,

line 14 . . . . . . . . . . . . . . . . . . . . . . . 4.

Line 15

Note: You will complete line 15 differently depending on

whether you have a net gain or loss and whether you have

a qualified disaster loss.

Net gain. If line 13 is more than line 14, you have a net

gain. Report the gain as follows.

• Combine your short-term gains with your short-term

losses and include the net short-term gain or (loss) on

Schedule D (Form 1040), line 4. Estates and trusts

include this amount on Schedule D (Form 1041),

line 4.

• Combine your long-term gains with your long-term

losses and include the net long-term gain or (loss) on

Schedule D (Form 1040), line 11. Estates and trusts

include this amount on Schedule D (Form 1041),

line 11.

The holding period for long-term gains and losses is

more than 1 year. For short-term gains and losses, it is 1

year or less. To figure the holding period, begin counting

Instructions for Form 4684 (2025)

on the day after you received the property and include the

day the casualty or theft occurred.

Generally, if you inherit property, you are considered to

have held the property for longer than 1 year, regardless

of how long you actually held it. If you inherited property

from someone who died in 2010 and the executor made

the election to file Form 8939, refer to the information

provided by the executor or see Pub. 4895, available at

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

your holding period.

Net loss. If line 13 is less than line 14 and you have

qualified disaster losses subject to the $500 reduction on

line 11 on any Form(s) 4684:

• Subtract line 13 from line 14. Enter the smaller of this

difference or the amount on line 12 of the Form 4684

listing those qualified disaster losses. The amount is

your net qualified disaster loss. If you are itemizing

your deductions, enter the amount on line 16 of

Schedule A (Form 1040), or line 7 of Schedule A

(Form 1040-NR), and “Net Qualified Disaster Loss.” If

you are claiming the increased standard deduction,

enter the amount on line 16 of Schedule A (Form

1040), or line 7 of Schedule A (Form 1040-NR), and

“Net Qualified Disaster Loss.” Also, do not include this

amount on line 15 of Schedule A (Form 1040), or

line 6 of Schedule A (Form 1040-NR), if you are not

itemizing your deductions.

Complete the rest of Schedule A either by:

• Itemizing other deductions as usual; or

• Including the amount of your standard deduction on

the dotted line next to Schedule A (Form 1040),

line 16, or Schedule A (Form 1040-NR), line 7. Also,

enter “Standard Deduction Claimed With Qualified

Disaster Loss” on that dotted line next to this amount.

See the instructions for Schedule A (Form 1040) or

the Instructions for Form 1040-NR for more

information. If you are also filing Form 6251, see

Taxpayers who also file the 2025 Form 6251,

Alternative Minimum Tax for Individuals, next.

Don’t complete the rest of this section if all your

personal casualty and theft losses are qualified disaster

losses subject to the $500 reduction.

If line 13 is less than line 14 and you have no qualified

disaster losses subject to the $500 reduction on line 11 of

your Form 4684, enter zero and go to line 16 and

complete the rest of the section.

Taxpayers who also file the 2025 Form 6251,

Alternative Minimum Tax for Individuals. If you file

Schedule A (Form 1040) or Schedule A (Form 1040-NR)

just to claim an increased standard deduction on Form

1040, 1040-SR, or 1040-NR, due to a loss you suffered

related to property in a federally declared disaster area,

enter zero on Form 6251, line 2a. Next, include the

amount of your standard deduction (before it is increased

by any net qualified disaster loss) in the total on line 3.

This is the amount you listed on the dotted line next to

Schedule A (Form 1040), line 16 or Schedule A (Form

1040-NR), line 7.

If you filed Schedule A to itemize your deductions, then

don’t make this adjustment.

9

Line 17

Estates and trusts figure AGI in the same way as

individuals, except that the costs of administration are

allowed in figuring AGI.

Section B—Business and Income-Producing

Property

Caution: You can no longer claim any miscellaneous

itemized deductions. As a result, business casualty and

theft losses of property used in performing services as an

employee cannot be deducted or applied in the netting

process to offset gains.

Use a separate column of Part I, lines 20 through 27, to

show each item lost or damaged from a single casualty or

theft described on line 19. If more than four items were

lost or damaged, use additional sheets following the

format of Part I, lines 19 through 27.

Use a separate Form 4684, Section B, Part I, for each

casualty or theft involving property used in a trade or

business or for income-producing purposes. Use one

Section B, Part II, to combine all Sections B, Part I.

For details on the treatment of casualties or thefts to

business or income-producing property, including rules on

the loss of inventory through casualty or theft, see Figuring

a Loss in Pub. 547.

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

profit.

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

memorandum number 202511015 for additional guidance.

Home Used for Business or Rented Out

If you had a casualty or theft loss involving a home you

used for business or rented out, your deductible loss may

be limited. First, complete Form 4684, Section B, lines 19

through 26. If the loss involved a home used for a

business for which you are filing Schedule C (Form 1040),

Profit or Loss From Business, figure your deductible

casualty or theft loss on Form 8829, Expenses for

Business Use of Your Home (if you are using Form 8829).

Enter on Form 4684, line 27, the deductible loss from

Form 8829, line 35, and “See Form 8829” above line 27.

For a home you rented out or used for a business for

which you aren’t filing Schedule C (Form 1040), see

section 280A(c)(5) to figure your deductible loss. Attach a

statement showing your computation of the deductible

loss, enter that amount on line 27, and enter “See

attached statement” above line 27.

10

If you used the simplified method to determine your

deductible expenses for business use of your home for

2025, figure the casualty or theft loss for the home office in

Section A instead of on Form 8829 and Section B.

Property Used in a Passive Activity

A gain or loss from a casualty or theft of property used in a

passive activity isn’t taken into account in determining the

loss from a passive activity unless losses similar in cause

and severity recur regularly in the activity. See Form 8582,

Passive Activity Loss Limitations, and its instructions for

details.

Losses From Ponzi-Type Investment Schemes

The IRS has issued the following guidance to assist

taxpayers who are victims of losses from Ponzi-type

investment schemes.

• Revenue Ruling 2009-9, 2009-14 I.R.B. 735 (available

at IRS.gov/irb/2009-14_IRB#RR-2009-9).

• Revenue Procedure 2009-20, 2009-14 I.R.B. 749

(available at IRS.gov/irb/2009-14_IRB#RP-2009-20).

• Revenue Procedure 2011-58, 2011-50 I.R.B. 849

(available at IRS.gov/irb/2011-50_IRB#RP-2011-58).

If you qualify to use Revenue Procedure 2009-20, as

modified by Revenue Procedure 2011-58, and choose to

follow the procedures in the guidance, first fill out

Section C to determine the amount to enter on Section B,

line 28. Skip lines 19 through 27. Section C of Form 4684

replaces Appendix A in Revenue Procedure 2009-20. You

don’t need to complete Appendix A.

For more information, see the instructions for

Section C, later, and the above revenue ruling and

revenue procedures.

If you choose not to use the procedures in Revenue

Procedure 2009-20, you may claim your theft loss by filling

out Section B, lines 19 through 39, as appropriate.

Section 179 Property of a Partnership or S

Corporation

Partnerships and S corporations that have a casualty or

theft involving property for which the section 179 expense

deduction was previously claimed and passed through to

the partners or shareholders must not use Form 4684 to

report the transaction. Instead, see the Instructions for

Form 4797 for details on how to report it. Partners and S

corporation shareholders who receive a Schedule K-1

reporting such a transaction should see the Instructions

for Form 4797 for details on how to figure the amount to

enter on Form 4684, line 20.

Line 19

If you are claiming a loss from a fraudulent investment

arrangement and you are not filling out Section C, you

must enter the name, taxpayer identification number (if

known), and address (if known) of the individual or entity

that conducted the fraudulent arrangement. Complete the

rest of Section B, Part I.

Instructions for Form 4684 (2025)

Line 20

Cost or adjusted basis usually means original cost plus

improvements, minus depreciation allowed or allowable

(including any section 179 expense deduction),

amortization, depletion, etc. Special rules apply to

property received as a gift or inheritance. See Basis Other

Than Cost in Pub. 551 for details. If you inherited the

property from someone who died in 2010 and the

executor of the decedent’s estate made the election to file

Form 8939, refer to the information provided by the

executor or see Pub. 4895, available at IRS.gov/Pub/IRSPrior/p4895--2011.pdf.

If you dispose of a portion of a Modified Accelerated

Cost Recovery System (MACRS) asset as a result of a

casualty event, enter the adjusted basis of the disposed

portion of the asset. MACRS assets include buildings (and

their structural components) and other tangible

depreciable property placed in service after 1986 that is

used in a trade or business or for the production of

income. The adjusted basis of the disposed portion of the

asset is the adjusted depreciable basis of that disposed

portion at the time of its disposition, as determined under

the applicable convention. You must reduce the basis and

the depreciation reserve of the MACRS asset by the basis

and depreciation reserve attributable to the disposed

portion as of the first day of the tax year, before you

compute the depreciation deduction for the current year.

To figure the depreciation deductions for the remaining

MACRS asset and the disposed portion, see the

instructions for Form 4562, line 19, column (g). For more

information, see Regulations section 1.168(i)-8. For partial

dispositions from casualties to MACRS assets accounted

for in a General Asset Account, see Regulations section

1.168(i)-1.

Line 21

See the instructions for line 3, earlier.

34 according to how long you held each property. Enter on

line 29 all gains and losses on property held 1 year or

less. Enter on line 34 all gains and losses on property held

more than 1 year, except as provided in the instructions for

line 33.

If you are claiming a theft loss from a Ponzi-type

investment scheme and are following the procedures in

Revenue Procedure 2009-20, 2009-14 I.R.B. 749, enter

on line 28 the amount from Section C, line 51. Don’t

complete Section B, lines 19 through 27, of Form 4684 for

that loss. You must fill out Section B, Part II.

Part II, Column (a)

On lines 29 and 34, use a separate line to identify each

casualty or theft. If you have more than two casualties or

thefts, attach an additional sheet following the format of

lines 29 and 34.

Example. Ishmael is claiming two casualty losses for

his business property. One loss is due to a fire in July and

the other loss is due to a hurricane in October. He fills out

one Section B, Part I, for the fire and another separate

Section B, Part I, for the hurricane. He held the property

for 1 year or less. He fills out only one Section B, Part II, to

summarize the two losses he is claiming. On line 29, he

enters “Fire” on the first line and “Hurricane” on the

second line.

Tip: If you are claiming a theft loss from a Ponzi-type

investment scheme, enter the name of the individual or

entity that conducted the fraudulent arrangement.

Part II, Column (b)(i)

Enter the part of line 28 from trade, business, rental, or

royalty property.

Part II, Column (b)(ii)

See the instructions for line 4, earlier.

Enter the part of line 28 from income-producing property.

Income-producing property is property held for

investment, such as stocks, notes, bonds, gold, silver,

vacant lots, and works of art.

Lines 23 and 24

Part II, Column (c)

See the instructions for lines 5 and 6 for details on

determining FMV.

On line 29, enter the part of line 22 that is from property

held for 1 year or less.

Loss on each item figured separately. Unlike a

casualty loss to personal-use real estate, in which all

improvements are considered one item, a casualty loss to

business or income-producing property must be figured

separately for each item. For example, if casualty damage

occurs to both a building and to trees on the same piece

of real estate, measure the loss separately for the building

and for the trees.

On line 34, enter the part of line 22 that is from property

held for more than 1 year.

Line 22

Line 30

Include in the total any amounts from the additional sheet

you attached because you had more than two casualties

or thefts on line 29.

Line 28

If the amount on line 28 includes losses on property held 1

year or less, and losses on property held for more than 1

year, you must allocate the amount between lines 29 and

Instructions for Form 4684 (2025)

11

Line 31

If Form 4797, Sales of Business Property, isn’t otherwise

required, enter the amount from this line on your Schedule

1 (Form 1040), line 4 and check the “4684” box.

Line 32

Estates and trusts, enter the amount from line 32 on the

“Other deductions” line of your tax return. Partnerships,

enter on Form 1065, Schedule K, line 13e. S corporations,

enter on Form 1120-S, Schedule K, line 12e. Next to that

line, enter “Form 4684.”

Line 33

If you had a casualty or theft gain from certain trade,

business, or income-producing property held more than 1

year, you may have to recapture part or all of the gain as

ordinary income. See the instructions for Form 4797, Part

III, for more information on the types of property subject to

recapture. If recapture applies, complete Form 4797, Part

III, and this line, instead of Form 4684, line 34.

Line 35

Include in the total any amounts from the additional sheet

you attached because you had more than two casualties

or thefts.

• Revenue Procedure 2011-58, 2011-50 I.R.B. 849

(available at IRS.gov/irb/2011-50_IRB#RP-2011-58).

Caution: Don’t fill out Section C if you don’t qualify to use

the procedures in Revenue Procedure 2009-20, as

modified by Revenue Procedure 2011-58, or you don’t

choose to follow them. Instead, go to the instructions for

Section B.

Line 40

Enter the initial amount of cash or basis of property that

you invested in the investment arrangement. Don’t include

any of the following on this line, line 41, or line 42.

• Amounts borrowed from the responsible group and

invested in the specified fraudulent arrangement, to

the extent the borrowed amounts weren’t repaid at the

time the theft was discovered.

• Amounts such as fees that were paid to the

responsible group and deducted for federal income

tax purposes.

• Amounts reported to you (the qualified investor) as

taxable income that weren’t included in gross income

on the investor’s federal income tax returns.

• Cash or property that you (the qualified investor)

invested in a fund or other entity (separate from you

(the qualified investor) for federal income tax

purposes) that invested in a specified fraudulent

arrangement.

Line 38a

For definitions of responsible group, specified

fraudulent arrangement, and qualified investor, see

Section 4 of Revenue Procedure 2009-20.

Taxpayers, other than partnerships and S corporations, if

Form 4797 isn’t otherwise required, enter the amount from

this line on the appropriate line for the form you are filing.

Line 41

Form 1040, 1040-SR, or 1040-NR filers. Enter this

amount on your Schedule 1 (Form 1040), line 4 and check

the “4684” box.

Form 1120, 1120-F, and 1120-POL filers. See the

Instructions for Schedule D (Form 1120) for where to

report this amount.

Section C—Theft Loss Deduction for Ponzi-Type

Investment Scheme Using the Procedures in

Revenue Procedure 2009-20

Fill out Section C if you claim a theft loss deduction for a

Ponzi-type investment scheme and you meet both of the

following conditions.

• You qualify to use Revenue Procedure 2009-20, as

modified by Revenue Procedure 2011-58.

• You choose to follow the procedures in the guidance.

If you meet both conditions, fill out Section C in lieu of

Appendix A in Revenue Procedure 2009-20.

For more information about claiming a theft loss

deduction from a Ponzi-type investment scheme, see the

following guidance.

• Revenue Ruling 2009-9, 2009-14 I.R.B. 735 (available

at IRS.gov/irb/2009-14_IRB#RR-2009-9).

• Revenue Procedure 2009-20, 2009-14 I.R.B. 749

(available at IRS.gov/irb/2009-14_IRB#RP-2009-20).

12

Enter the amounts of cash or the basis of property that

you invested after you made the initial investment

(including amounts reinvested).

Line 42

Enter the total amounts of net income (for example,

interest and dividends minus expenses) from the specified

fraudulent arrangement that, consistent with information

received from that arrangement, you included in income

for federal tax purposes for all tax years before the

discovery year, including tax years for which a refund is

barred by the statute of limitations.

Discovery year. The discovery year is the tax year when

one of the following occurs.

• The indictment, information, or complaint described in

section 4.02(1) or (2) of Revenue Procedure 2009-20

(as modified by Revenue Procedure 2011-58) is filed.

• The complaint or similar document described in

section 4.02(3) of Revenue Procedure 2009-20 (as

modified by Revenue Procedure 2011-58) is filed, or

the death of the lead figure occurs, whichever is later.

Instructions for Form 4684 (2025)

Line 44

Enter the total amount of cash or property that you

withdrew from the investment arrangement in all years

(whether designated as income or principal).

information you enter in this part will be used to verify the

fraudulent investment arrangement.

Section D—Election To Deduct Federally

Declared Disaster Loss in Preceding Tax Year

This is the amount of your investment that is eligible for a

deduction before any actual or potential recoveries are

taken into account.

Read the discussion under Disaster Losses, earlier. Then

fill out Section D if you want to elect to deduct a disaster

loss on your tax return for the preceding year. You may

also fill out Section D if you want to revoke a previous

election to deduct a disaster loss in the tax year

immediately preceding the disaster year.

Line 46

Part I—Election Statement

Line 45

Potential third-party recovery. This is the amount of all

actual or potential claims for recovery, as of the last day of

the discovery year (defined earlier), that are not from

potential insurance or Securities Investor Protection

Corporation (SIPC) recovery, or a potential direct recovery.

Potential insurance/SIPC recovery. This is the total of

all actual or potential claims for reimbursement that, as of

the last day of the discovery year, are attributable to:

• Insurance policies in your name that protect you from

this type of loss;

• Contractual arrangements, other than insurance, that

guaranteed or otherwise protected against this type of

loss; or

• Amounts payable from SIPC, as advances for

customer claims under the Securities Investor

Protection Act of 1970, or by a similar entity under a

similar provision.

Potential direct recovery. This is the amount of all

actual or potential claims for recovery, as of the last day of

the discovery year (defined earlier), against the

responsible individual or group.

Line 48

Fill out Part I if you want to make an election to deduct a

loss attributable to a federally declared disaster and that

occurred in a federally declared disaster area in the tax

year immediately preceding the tax year the loss was

sustained. By making this election, you agree not to

deduct the loss for the disaster year.

Attach Section D to your original return or amended

return for the tax year immediately preceding the tax year

the loss was sustained to claim the disaster loss

deduction.

You must make this election on or before the date that

is 6 months after the regular due date for filing your

original return (without extensions) for the disaster year.

Part II—Revocation of Prior Election

Fill out Part II if you want to revoke a prior election to

deduct a loss attributable to a federally declared disaster

and that occurred in a federally declared disaster area in

the tax year immediately preceding the tax year the loss

was sustained.

Line 49

Attach Section D to your amended return for the tax

year immediately preceding the tax year the loss was

sustained to revoke the previous disaster loss deduction.

You must file this amended return for the preceding year

on or before the date you file the original return or

amended return for the disaster year on which you claim

the disaster loss.

Enter the amount of potential insurance/SIPC recovery

(defined earlier).

You can revoke the prior election on or before the date

that is 90 days after the due date for making the election.

Line 51

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. You are required to give us the

information. We need it to ensure that you are complying

with these laws and to allow us to figure and collect the

right amount of tax.

Enter the amounts you actually received as a

reimbursement or recovery from any source. Don’t include

amounts that are potential direct recoveries (defined

earlier) or potential third-party recoveries (defined earlier).

Enter the amount from line 51 on line 28 of Section B.

Don’t complete lines 19 through 27 for this loss. Then

complete Section B, Part II.

Tip: If you had other casualties or thefts, fill out a

separate Section B, Part I, for them.

Part II

Read the statements and declarations in this part

carefully. Enter the required information in the spaces

provided. You are agreeing to these statements and

declarations when you sign your tax return. The

Instructions for Form 4684 (2025)

You aren’t required to provide the information requested

on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number.

Books or records relating to a form or its instructions must

be retained as long as their contents may become

material in the administration of any Internal Revenue law.

Generally, tax returns and return information are

confidential, as required by section 6103.

13

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

burden for individual taxpayers filing this form is approved

under OMB control number 1545-0074 and is included in

the estimates shown in the instructions for their individual

income tax return. The estimated burden for all other

taxpayers who file this form is shown below.

Recordkeeping . . . . . . . . . . . . .

2 hr., 37 min.

Learning about the law or the

form . . . . . . . . . . . . . . . . . . . . . .

24 min.

Preparing the form . . . . . . . . . .

1 hr., 58 min.

Copying, assembling, and

sending the form to the IRS . . .

1 hr., 3 min.

14

If you have comments concerning the accuracy of

these time estimates or suggestions for making this form

simpler, we would be happy to hear from you. See the

instructions for the tax return with which this form is filed.

Instructions for Form 4684 (2025)

Index

A

Amended return 1, 6

C

Corrosive drywall 6

D

Deductible losses:

Casualty losses 3

Theft losses 3

When to deduct 4

Deposit losses 6

Disaster area losses 4

East Palestine disaster relief

payments 6

Home damaged or destroyed 5

Home made unsafe 4

How to deduct loss in preceding

year 4

Wildfire relief payments 6

Disaster loss 2

F

Federal casualty loss 2

Federally declared disaster:

Disaster loss 2

Federal casualty loss 2

Qualified disaster loss 2

Financial scams 10

G

N

Nondeductible losses 3

P

Personal-use property 1, 3

Ponzi-type investment

schemes 10

Postponed tax deadlines 1

Q

Gain on reimbursement 3

Qualified disaster loss 2

Qualified opportunity funds 2

L

R

Losses:

Casualty losses 3

Theft losses 3

When to deduct 4

Reimbursement 7

Related expenses 3

15