U.S. Individual Income Tax Return

2011

Instructions for Form 4684

Department of the Treasury
Internal Revenue Service

Casualties and Thefts
Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
What’s New
Future developments. The IRS has
created a page on IRS.gov for information
about Form 4684 and its instructions, at
www.irs.gov/form4684. Information about
any future developments affecting Form
4684 (such as legislation enacted after we
released it) will be posted on that page.

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

Losses You Can Deduct
You can deduct losses of property from fire,
storm, shipwreck, or other casualty, or theft
(for example, larceny, embezzlement, and
robbery).
If your property is covered by insurance,
you must file a timely insurance claim for
reimbursement of your loss. Otherwise, you
cannot deduct the loss as a casualty or theft
loss. However, the part of the loss that is not
covered by insurance is still 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, are not
deductible as casualty or theft losses.
Costs for protection against future
casualties are not deductible but should be
capitalized as permanent improvements. An
example would be the cost of a levee to stop
flooding.

Losses You Cannot
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.

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.
Do not 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.
Nov 01, 2011

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.

• All other taxpayers, unless the aggregate

Generally, you must recognize the gain if
you receive unlike property or money as
reimbursement. But you generally can
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.

If your main home was located in a
disaster area and that home or any of its
contents were damaged or destroyed due to
the disaster, special rules apply. See Gains
Realized on Homes in Disaster Areas later.

The replacement period is 5 years,
instead of 2 years, if the property was
located in the:
• Hurricane Katrina disaster area (which
includes the states of Alabama, Florida,
Louisiana, and Mississippi) and that
property was converted after August 24,
2005, as a result of Hurricane Katrina, but
only if substantially all of the use of the
replacement property is in that disaster
area.
• Kansas disaster area (as defined in Pub.
4492-A, Information for Taxpayers Affected
by the May 4, 2007, Kansas Storms and
Tornadoes) and that property was converted
after May 3, 2007, as a result of the storms
or tornadoes, but only if substantially all of
the use of the replacement property is in
that disaster area.
• Midwestern disaster areas (as defined in
Pub. 4492-B, Information for Affected
Taxpayers in the Midwestern Disaster
Areas) and that property was converted on
or after the applicable disaster date as a
result of severe storms, tornadoes, or
flooding, but only if substantially all of the
use of the replacement property is in those
disaster areas.
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 cannot be postponed by:
• Corporations (other than S corporations),
• Partnerships more than 50% owned by
one or more corporations (other than S
corporations), or
Cat. No. 12998Z

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, see section 1033(i).
For details on how to postpone the gain,
see Pub. 547, Casualties, Disasters, and
Thefts.

When To Deduct a Loss
Deduct the part of your casualty or theft loss
that is not reimbursable in the tax year the
casualty occurred or the theft was
discovered. However, a disaster loss and a
loss from deposits in insolvent or bankrupt
financial institutions may be treated
differently. See Disaster Losses and Special
Treatment for Losses on Deposits in
Insolvent or Bankrupt Financial Institutions
later.
If you are not sure whether part of your
casualty or theft loss will be reimbursed, do
not deduct that part until the tax year when
you become reasonably certain that it will
not be reimbursed.
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 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. It includes a major disaster or
emergency declaration. A list of areas
warranting public or individual assistance (or
both) is available at the Federal Emergency
Management Agency (FEMA) website at
www.fema.gov.
If you have a casualty loss from a
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 prior to the tax year in which
the disaster occurred as long as the loss
would otherwise be allowed as a deduction
in the tax year it occurred.
This election must be made by filing your
return or amended return for the prior year,
and claiming your disaster loss on it, by the
later of:

• The due date for filing your original return

(without extensions) for the tax year in which
the disaster actually occurred, or
• The due date for filing your original return
(including extensions) for the tax year
immediately prior to the tax year in which
the disaster actually occurred.
You can revoke your election within 90
days after making it by returning to the IRS
any refund or credit you received from the
election. If you revoke your election before
receiving a refund, you must repay the
refund within 30 days after receiving it.
On line 1 of the Form 4684 on which you
claim the disaster loss (or on an
attachment), specify the date(s) of the
disaster and the city, town, county or parish,
and state in which the damaged or
destroyed property was located.
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.
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 because of the
disaster, the loss in value because it is no
longer safe 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.

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.

However, the 4-year period is extended to 5
years if your main home or any of its
contents were located in the:
a. Hurricane Katrina disaster area
(which includes the states of Alabama,
Florida, Louisiana, and Mississippi) and that
property was converted after August 24,
2005, as a result of Hurricane Katrina, but
only if substantially all of the use of the
replacement property is in that disaster
area.
b. Kansas disaster area (as defined in
Pub. 4492-A) and that property was
converted after May 3, 2007, as a result of
the storms or tornadoes, but only if
substantially all of the use of the
replacement property is in that disaster
area.
c. Midwestern disaster areas (as
defined in Pub. 4492-B) and that property
was converted on or after the applicable
disaster date as a result of severe storms,
tornadoes, or flooding, but only if
substantially all of the use of the
replacement property is in those disaster
areas.
For details on how to postpone gain, see
Pub. 547.
Example. Your main home and its
contents were completely destroyed in 2011
by a tornado in a federally declared disaster
area. In 2011, 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. The jewelry and stamp
collection were kept in your home and were
scheduled property on your insurance
policy. No gain is recognized on the $25,000
you received for the unscheduled personal
property. If you reinvest the remaining
proceeds of $215,000 in a replacement
home, any type of replacement contents
(whether scheduled or unscheduled), or
both, you can elect to postpone any gain on
your home, jewelry, or stamp collection. If
you reinvest less than $215,000, any gain is
recognized only to the extent $215,000
exceeds the amount you reinvest in a
replacement home, any type of replacement
contents (whether scheduled or
unscheduled), or both. To postpone gain,
you must purchase the replacement
property before 2016. Your basis in the
replacement property equals its cost
decreased by the amount of any postponed
gain.

Special Treatment for
Losses on Deposits in
Insolvent or Bankrupt
Financial Institutions
If you are an individual who incurred a loss
from a deposit in a bank, credit union, or
other financial institution because of the
bankruptcy or insolvency of that institution
and you can reasonably estimate your loss,
you can elect to deduct the loss as:
• A casualty loss to personal use property
on Form 4684, or
• An ordinary loss (miscellaneous itemized
deduction) on Schedule A (Form 1040),
Itemized Deductions, line 23, or Form
1040NR, Schedule A, Itemized Deductions,
line 9. You cannot elect the ordinary loss
deduction if any part of the deposits related

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to the loss is federally insured. The
maximum amount you can claim is $20,000
($10,000 if you are married filing
separately). Your deduction is reduced by
any expected state insurance proceeds and
is subject to the 2%-of-AGI limit.
If you elect to deduct the estimated loss
as a casualty loss or as an ordinary loss,
you cannot claim the same loss as a
nonbusiness bad debt. If the estimated loss
deducted is less than the actual loss, you
can claim the difference as a nonbusiness
bad debt for the year in which the final
determination of the loss occurs. A
nonbusiness bad debt is deducted on
Schedule D (Form 1040), Capital Gains and
Losses, as a short-term capital loss.
If you are a 1% or more owner or an
officer of the financial institution, or are
related to any such owner or officer, you
cannot deduct the loss as a casualty loss or
as an ordinary loss. See Pub. 550,
Investment Income and Expenses, for the
definition of “related.”
If you elect to deduct the loss as a
casualty loss or as an ordinary loss and you
have more than one account in the same
financial institution, you must include all your
accounts. Once you make the election, you
cannot change it without permission from
the IRS. See Notice 89-28, 1989-1 C.B. 667,
for more details.
To elect to deduct the loss as a casualty
loss, complete Form 4684 as follows: On
line 1, enter the name of the financial
institution and “Insolvent Financial
Institution.” Skip lines 2 through 9. Enter the
amount of the loss on line 10, and complete
the rest of Section A.
If, in a later year, you recover an amount
you deducted as a loss, you may have to
include in your income the amount
recovered for that year. For details, see
Recoveries in Pub. 525, Taxable and
Nontaxable Income.

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 www.irs.gov/irb/
2009-14_IRB/ar07.html).
• Revenue Procedure 2009-20, 2009-14
I.R.B. 749 (available at www.irs.gov/irb/
2009-14_IRB/ar11.html).
These losses are deductible as theft losses
of income-producing property on your tax
return for the year the loss was discovered.
You figure the deductible loss in Section B
of Form 4684. If you qualify to use Revenue
Procedure 2009-20 and choose to follow the
procedures in the guidance, you also must
complete Appendix A of that procedure and
write ‘‘Revenue Procedure 2009-20’’ across
the top of Form 4684. For more information,
see the above revenue ruling and revenue
procedure.

Damage From Corrosive
Drywall
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 Pub. 547.

Specific Instructions
Which Sections To
Complete
Use Section A to figure casualty or theft
gains and losses for property that is not
used in a trade or business or for
income-producing purposes.
Casualty or theft losses of personal use
property are deductible only to the extent
that the amount of the loss from each
separate casualty or theft is more than $100
and the total amount of all losses (as so
reduced) during the year is more than 10%
of your AGI (Form 1040, line 38, or Form
1040NR, line 37).
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.

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.
Do not 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 Pub. 547.

Line 1
Describe the type of property (for example,
furniture, jewelry, car, etc.).
If you claim a disaster loss (defined
earlier), specify the date(s) of the disaster
and the city, town, county or parish, and
state in which the damaged or destroyed
property was located. Include this
information on line 1 or on an attached
statement.

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 Pub.
551, Basis of Assets, 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.

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 collision. 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 have
not 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 will not be
reimbursed for all or part of the loss, you
can deduct for that year the amount of the
loss that is not 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 do not 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.
• A bonding company pays you for a theft
loss, the payment is also considered a
reimbursement.
Lump-sum reimbursement. If you have a
casualty or theft loss of several assets at the
same time and you receive a lump-sum
reimbursement, you must divide the amount
you receive among the assets according to
the fair market value of each asset at the
time of the loss.
Grants, gifts, and other payments.
Grants and other payments you receive to
help you after a casualty are considered
reimbursements only if they must be used
specifically to repair or replace your
property. Such payments will reduce your
casualty loss deduction. If there are no
conditions on how you have to use the
money you receive, it is not a
reimbursement.
Use and occupancy insurance. If
insurance reimburses you for your loss of
business income, it does not 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 generally can 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 generally must have owned and
lived in the property as your main home for
at least 2 years during the 5-year period

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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, do not 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 cannot 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 do not enter less
than zero.
If you filed a claim for reimbursement but
did not receive it until after the year of the
casualty or theft, include the gain in your
income in the year you received the
reimbursement.

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

• The value of the property after the repairs

is not, 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, 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.

Line 15
If line 14 is more than line 13:
• 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 2.
• 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 7.
The holding period for long-term gains
and losses is more than 1 year. For
short-term gains and losses, it is 1 year or
less. To figure the holding period, begin
counting on the day after you received the
property and include the day the casualty or
theft occurred.
Generally, if you inherit property, you are
considered to have held the property for
longer than 1 year, regardless of how long
you actually held it. If you inherited property
from someone who died in 2010 and the
executor made the election to file Form
8939, refer to the information provided by
the executor or see Pub. 4895 to determine
your holding period.

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
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 Pub.
547.
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.
Enter on Form 4684, line 27, the deductible
loss from Form 8829, line 34, and “See
Form 8829” above line 27. For a home you
rented out or used for a business for which
you are not 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 “See
attached statement” above line 27.

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 line 10 in
Part II of Appendix A. Do not complete the
remainder of Section B, Part I of Form 4684
for that loss.

Note. A gain or loss from a casualty or
theft of property used in a passive activity is
not 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.

Part II, Column (a)

Section 179 Property of a
Partnership or S Corporation
Partnerships (other than electing large
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 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 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.

Line 21
See the instructions for line 3.

Line 22
See the instructions for line 4.

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

Line 28
If the amount on line 28 includes losses on
property held 1 year or less, and losses on
property held for more than 1 year, you must
allocate the amount between lines 29 and

-4-

Use a separate line for each casualty or
theft.

Part II, Column (b)(i)
Enter the part of line 28 from trade,
business, rental, or royalty property (other
than property you used in performing
services as an employee).

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

Line 31
If Form 4797, Sales of Business Property, is
not otherwise required, enter the amount
from this line on page 1 of your tax return,
on the line identified as from Form 4797.
Next to that line, enter “Form 4684.”

Line 32
Estates and trusts, enter on the “Other
deductions” line of your tax return.
Partnerships (except electing large
partnerships), enter on Form 1065,
Schedule K, line 13d. Electing large
partnerships, enter on Form 1065-B, Part II,
line 11. S corporations, enter on Form
1120S, Schedule K, line 12d. 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 38a
Taxpayers, other than partnerships and S
corporations, if Form 4797 is not otherwise
required, enter the amount from this line on
page 1 of your tax return, on the line
identified as from Form 4797. Next to that
line, enter “Form 4684.”
Paperwork Reduction Act Notice. We
ask for the information on this form to carry
out the Internal Revenue laws of the United
States. You are required to give us the
information. We need it to ensure that you
are complying with these laws and to allow
us to figure and collect the right amount of
tax.

You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long
as their contents may become material in
the administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required by
section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated burden for
individual taxpayers filing this form is
approved under OMB control number

1545-0074 and is included in the estimates
shown in the instructions for their individual
income tax return. The estimated burden for
all other taxpayers who file this form is
shown below.

Recordkeeping . . . . . .

1 hr., 58 min.

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

33 min.

Preparing the form . . .

2 hrs., 25 min.

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

34 min.

-5-

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.