Updated October 18, 2026. Quick answer: Part I of Section B on Form 4684 figures the casualty or theft gain or loss on business and income-producing property, one casualty or theft at a time. Lines 19 to 28 mirror the personal use lines in Section A. Line 28 carries the total to Part II.
Related reading on this site: IRS Publication 547.
What this part is for
The heading reads “SECTION B” for business and income-producing property, then Part I, casualty or theft gain or loss. The instructions explain the use: “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.” Personal use property belongs in Form 4684 Section A, and the whole form is introduced at Form 4684.
On how many parts to file: “Use one Section B, Part II, to combine all Sections B, Part I.” That summary is covered at Form 4684 Section B, Part II.
The lines, one by one
| Line | What the form says |
|---|---|
| Line 19 | “Description of properties (show type, location, and date acquired for each property).” “Use a separate line for each property lost or damaged from the same casualty or theft.” |
| Line 20 | “Cost or adjusted basis of each property” |
| Line 21 | “Insurance or other reimbursement (whether or not you filed a claim). See the instructions for line 3” |
| Line 22 | “Gain from casualty or theft. If line 21 is more than line 20, enter the difference here and on line 29 or line 34, column (c)” |
| Line 23 | “Fair market value before casualty or theft” |
| Line 24 | “Fair market value after casualty or theft” |
| Line 25 | “Subtract line 24 from line 23” |
| Line 26 | “Enter the smaller of line 20 or line 25” “If the property was totally destroyed by casualty or lost from theft, enter on line 26 the amount from line 20.” |
| Line 27 | “Subtract line 21 from line 26.” |
| Line 28 | “Casualty or theft loss. Add the amounts on line 27. Enter the total here and on line 29 or line 34.” |
As in Section A, lines 20 to 27 run in a column for each of up to four properties.
Where the number comes from
Line 19: “you must enter the name, taxpayer identification number (if known), and address (if known) of the individual or entity that conducted the fraudulent arrangement.” The instructions give this for “a loss from a fraudulent investment arrangement and you are not filling out Section C”.
Line 20: “Cost or adjusted basis usually means original cost plus improvements, minus depreciation allowed or allowable”. Line 21: “See the instructions for line 3, earlier.” Line 22: “See the instructions for line 4, earlier.” Lines 23 and 24: “See the instructions for lines 5 and 6 for details on determining FMV”.
For a casualty loss to business or income-producing property, the instructions say it “must be figured separately for each item.”
For a home used in a business or rented out, “First, complete Form 4684, Section B, lines 19 through 26.” “Enter on Form 4684, line 27, the deductible loss from Form 8829, line 35” when Schedule C and Form 8829 apply; see Form 8829 lines 28 to 36 for that part of the home office form.
The instructions also carry this caution: “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.”
Where it goes next
Line 28 splits by holding period: “you must allocate the amount between lines 29 and 34 according to how long you held each property.” “Enter on line 29 all gains and losses on property held 1 year or less.” “Enter on line 34 all gains and losses on property held more than 1 year”, except as provided for line 33. Those lines are read at Form 4684 Section B, Part II.
For a theft from an investment scheme that uses Section C, “enter on line 28 the amount from Section C, line 51.” That route is covered at Form 4684 Sections C and D. Capital asset sales that also flow through the return are on Form 8949.
A worked example
Illustration, not an IRS example. Suppose one business property held for any period, with invented figures.
| Item | Illustration |
|---|---|
| Line 20 | $10,000 (invented, for the computation) |
| Line 21 | $2,000 (invented, for the computation) |
| Line 23 | $15,000 (invented, for the computation) |
| Line 24 | $6,000 (invented, for the computation) |
| Line 25: line 23 minus line 24 | $9,000 (computed) |
| Line 26: smaller of line 20 or line 25 | $9,000 (computed) |
| Line 27: line 26 minus line 21 | $7,000 (computed) |
| Line 28 (one column) | $7,000 (computed) |
Line 25 is 15,000 minus 6,000 = 9,000, line 26 is the smaller of 10,000 and 9,000, line 27 is 9,000 minus 2,000 = 7,000, and line 28 is 7,000. Line 22 is skipped because line 20 is more than line 21.
Edition and line numbers
This page reads Form 4684 for 2025 and its 2025 instructions, the current files irs.gov served on 2026-10-18. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Deducting a loss on property used as an employee. The instructions say “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.”
- Filling out lines 19 through 27 for a Section C theft loss. The instructions say “Don’t complete Section B, lines 19 through 27, of Form 4684 for that loss.”
- Putting the whole of line 28 on one line of Part II. The instructions say “you must allocate the amount between lines 29 and 34 according to how long you held each property.”
Related: Form 4684, casualty losses after the 2017 tax law, Form 8829 lines 28 to 36, and Form 8949.
Sources
- Form 4684 (2025), Casualties and Thefts: https://www.irs.gov/pub/irs-pdf/f4684.pdf
- 2025 Instructions for Form 4684: https://www.irs.gov/pub/irs-pdf/i4684.pdf
- IRS: About Form 4684: https://www.irs.gov/forms-pubs/about-form-4684
Read from the IRS documents linked above on October 18, 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.