Updated October 9, 2026. Quick answer: Form 4684 reports casualty and theft gains and losses, and the 2025 instructions say that for an individual, losses of personal-use property are deductible only if attributable to a federally declared disaster. Those losses generally face a $100 per casualty reduction and a 10% of adjusted gross income floor, with different rules for a qualified disaster loss. This page reads the 2025 form and instructions.
Related reading on this site: IRS Publication 547.
Form lines read one part at a time: Form 4684 Section A, Form 4684 Section B Part I and Form 4684 Sections C and D.
Business use of your home (Form 8829), the saver’s credit (Form 8880), clean vehicle credits (Form 8936) and amended returns (Form 1040-X), read line by line: Form 8829 lines 8 to 15 and Form 8829 lines 28 to 36.
Sales of business property (Form 4797), passive activity losses (Form 8582) and depreciation (Form 4562) for 2025, read line by line: Form 4797 line 2, Form 4797 lines 13 to 18 and Form 8582 Part IX.
Schedule D and Schedule E (Form 1040) for 2025, read line by line: Schedule D lines 4 and 5 and Schedule D lines 11 and 12.
Schedule A and Schedule B (Form 1040) for 2025, read line by line: Schedule A line 15, Schedule A line 16 and Schedule A line 17.
Schedule 1 (Form 1040) for 2025, read line by line: Schedule 1 lines 3 to 6.
The partner’s Schedule K-1 (Form 1065), read box by box: Schedule K-1 box 11 and Schedule K-1 box 20 N AE AF.
What Form 4684 is for and which section to use
“Use Form 4684 to report gains and losses from casualties and thefts.” “Attach Form 4684 to your tax return.” The form itself adds “Use a separate Form 4684 for each casualty or theft.” The instructions then sort the work into sections:
| Section | What the instructions say it is for |
|---|---|
| Section A | “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.” |
| Section B | “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.” |
| Section C | “Use Section C to figure a theft loss deduction from a Ponzi-type investment scheme” |
| Section D | “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” |
Property that is both personal and business gets split. The instructions give the example: “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.” The rest of this page follows Section A and Section B in turn.
The personal-use property rule: federally declared disasters
The central rule for an individual is stated twice, once in the instructions and once on the form: “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).”
The instructions define the term: “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).” When you report one, the form asks you to “check the box and enter the DR or EM declaration number assigned by FEMA”. The wider background on this change is covered at casualty losses after the 2017 tax law.
There is one stated exception for people who also have gains. “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.”
Some losses are never deductible as casualty losses. The instructions list among them “Money or property misplaced or lost.” and “Progressive damage to property (buildings, clothes, trees, etc.) caused by termites, moths, other insects, or disease.” Related costs do not count either: “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.”
How the loss is figured, including insurance
Section A works column by column for each damaged item. The instructions define cost basis this way: “Cost or other basis usually means original cost plus improvements.” Fair market value is also defined: “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.” Repair costs are not a shortcut: “Replacement cost or the cost of repairs isn’t necessarily FMV.”
The form’s lines run as follows:
| Form line | Wording on the form |
|---|---|
| Line 2 | Cost or other basis of each property |
| Line 3 | Insurance or other reimbursement (whether or not you filed a claim) |
| Line 7 | “Subtract line 6 from line 5” |
| Line 8 | “Enter the smaller of line 2 or line 7” |
| Line 9 | “Subtract line 3 from line 8. If zero or less, enter -0-” |
| Line 12 | “Subtract line 11 from line 10. If zero or less, enter -0-” |
| Line 17 | “Enter 10% of your adjusted gross income from Form 1040, 1040-SR, or 1040-NR, line 11b.” |
| Line 18 | “Subtract line 17 from line 16. If zero or less, enter -0-.” |
The following is an illustration with made-up amounts, not an IRS example. It assumes one casualty attributable to a federally declared disaster, no casualty gains, and no qualified disaster loss:
| Step | Amount | Note |
|---|---|---|
| Line 2: cost or other basis | $60,000 | Illustration |
| Line 5: fair market value before | $80,000 | Illustration |
| Line 6: fair market value after | $20,000 | Illustration |
| Line 7: $80,000 minus $20,000 | $60,000 | Computed here |
| Line 8: smaller of line 2 or line 7 | $60,000 | Computed here |
| Line 3: insurance received | $25,000 | Illustration |
| Line 9: $60,000 minus $25,000 | $35,000 | Computed here |
| Line 12: $35,000 minus $100 on line 11 | $34,900 | Computed here |
| Line 17: 10% of an assumed $90,000 adjusted gross income | $9,000 | Computed here |
| Line 18: $34,900 minus $9,000 | $25,900 | Computed here |
In the illustration, line 15 would be zero because the form says that with no gains and no qualified disaster loss you “enter -0- here and go to line 16.” The $25,900 on line 18 is what the form sends to Schedule A, using the line 18 wording: “Also, enter the result on Schedule A (Form 1040), line 15”.
Line 3 counts money you got or expect to get. The instructions say: “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.” They give a worked case: a car worth $2,000 destroyed in a flood with a $500 deductible and no claim filed, where the line 3 entry is “enter $1,500 on this line.”
A claim you skip can cost you the deduction: “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.”
Reimbursements come in several forms. For example, “Part of a federal disaster loan is forgiven, the part you don’t have to pay back is considered a reimbursement;” and when a payment turns out larger than your basis there is a gain: “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.”
Qualified disaster losses and the reductions
The ordinary reductions are stated in the instructions: “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.”
Qualified disaster losses work differently: “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.” Line 11 of the form reflects this: “Enter $100 ($500 if qualified disaster loss rules apply; see instructions)”. The definition is date-limited. One of the listed categories is “A major disaster that was declared by the President during the period between January 1, 2020, and September 2, 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.”
A qualified disaster loss also has a reporting benefit: “You can deduct qualified disaster losses without itemizing other deductions on Schedule A.” For the Schedule A mechanics see Schedule A.
Business, rental and passive-activity property
Section B handles property used in a trade or business or to produce income. For a home that was rented out, the instructions warn: “If you had a casualty or theft loss involving a home you used for business or rented out, your deductible loss may be limited.” They point to “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.”
Passive activities have their own rule: “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.” The passive loss rules are explained at Form 8582. If damaged business property is sold or disposed of, see Form 4797.
Which revision applies
The edition read for this page is the Instructions for Form 4684 (2025), the version dated December 19, 2025, together with the 2025 form, which is the revision irs.gov served when it was read on 2026-10-09. A later revision can change line numbers or the disaster rules, so check the revision printed on the form you are filing. “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.” The IRS keeps that page at About Form 4684.
Every Form 4684 section page in one table
Each row links to the page that reads a part, section or line group of Form 4684. The right column is the summary each page carries.
| Page | What it covers |
|---|---|
| Form 4684 Section A: Personal Use Property, Lines 1 to 18 | Form 4684 Section A for 2025, lines 1 to 18: what each line asks, where the numbers come from, and where the result goes on Schedule A and Schedule D. |
| Form 4684 Section B Part I: Business Casualty or Theft | Form 4684 Section B, Part I for 2025, lines 19 to 28: what each line asks, where cost and reimbursement come from, and where line 28 goes. |
| Form 4684 Section B Part II: Summary of Gains and Losses | Form 4684 Section B, Part II for 2025, lines 29 to 39: what each line asks, how holding period splits the lines, and where the result goes. |
| Form 4684 Sections C and D: Ponzi Theft and Disaster Election | Form 4684 Sections C and D for 2025, lines 40 to 57: the Ponzi-type theft computation, the prior-year disaster election, and where each result goes. |
Common mistakes
- Combining several events on one form. The form says “You must use a separate Form 4684 (through line 12) for each casualty or theft event involving personal-use property.”
- Leaving out insurance you did not claim. The instructions say to “Include your insurance coverage whether or not you are filing a claim for reimbursement.”
- Using repair or replacement cost as the drop in value. The instructions say “Replacement cost or the cost of repairs isn’t necessarily FMV.”
Related: casualty losses after the 2017 tax law, Schedule A, Form 4797, and Form 8582.
Sources
- Form 4684 (2025): https://www.irs.gov/pub/irs-pdf/f4684.pdf
- Instructions for Form 4684 (2025): https://www.irs.gov/pub/irs-pdf/i4684.pdf
Read from the IRS documents linked above on October 9, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.