4684 Instructions for Form 4684

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2022

Department of the Treasury
Internal Revenue Service

Instructions for Form 4684
Casualties and Thefts

DRAFT AS OF
November 1, 2022

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

General Instructions
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.

Reminders

Mandatory 60-day postponement. Certain
taxpayers affected by a federally declared
disaster that occurs after December 20, 2019,
may be eligible for a mandatory 60-day
postponement for certain tax deadlines such as
filing or paying income, excise, and
employment taxes; and making contributions to
a traditional IRA or Roth IRA. For more
information, see Pub. 547.

How to report the loss on Form 1040-X. You
should adjust your deductions on Form 1040-X.
The Instructions for Form 1040-X show how to
do this. Explain the reasons for your adjustment
and attach Form 4684 to show how you figured
your loss. See Figuring a Loss 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
and the Taxpayer Certainty and Disaster Tax
Relief Act of 2020 expanded the special rules
and return procedures for personal casualty
losses attributable to certain major federal
disasters that were declared in 2018, 2019, and
2020.
Qualified disaster losses in those tax years
may be claimed on Form 4684. See Qualified
disaster loss, later, for more information.
You may have to file an amended

TIP return on Form 1040-X to claim these

benefits on your 2018, 2019, and/or
2020 returns. 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 2018 through 2025, if
Oct 27, 2022

you are an individual, casualty or theft losses of
personal-use property are deductible only if the
loss is attributable to a federally declared
disaster.
Personal casualty and theft losses
attributable to a federally declared disaster are
subject to the $100 per casualty and 10% 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 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 2022 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 2022 Form 6251,
Alternative Minimum Tax for Individuals, later,
for more information.
Electing large partnership rules repealed.
Rules relating to electing large partnerships
have been repealed. References to electing
large partnerships have been revised
accordingly on Form 4684 and in these
instructions. See Section B—Business and
Income-Producing Property, later.
Special rules for capital gains invested in
qualified opportunity funds (QOFs). If you
have a capital gain for 2022, 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. For additional information, see

Cat. No. 12998Z

Opportunity Zones Frequently Asked
Questions.

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.

Purpose of Form

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

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. 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.

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.

• 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.

DRAFT AS OF
November 1, 2022

Qualified disaster loss. A qualified disaster
loss also 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 February 25, 2021. Also, this
disaster must have an incident period that
began on or after December 28, 2019, and on
or before December 27, 2020. However, this
change does not include those losses
attributable to any major disaster which 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.
See also IRS.gov/DisasterTaxRelief for
date-specific declarations associated with
these disasters and for more information.

Losses You Can Deduct

For tax years 2018 through 2025, 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.
An exception to the rule limiting the
deduction for personal casualty and
CAUTION theft losses to federal casualty losses
applies where you have personal casualty gains
to the extent the losses don’t exceed your
gains.

!

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 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 fraudulent investment
schemes can claim a theft loss deduction if
certain conditions apply. See 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
-2-

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 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.
For a list of federally declared disasters

TIP and disaster areas, see FEMA.gov/
Disasters.

Instructions for Form 4684 (2022)

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.

for the preceding year (that is, to an amended
2021 return for the revocation of a 2022
disaster year election). See
Section D—Election To Deduct Federally
Declared Disaster Loss in Preceding Tax Year,
later.

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.

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.

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.”

DRAFT AS OF
November 1, 2022

Example. In December 2021, 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 2022 when your insurance company
reimbursed you for only half of your loss. The
disaster year is 2022 (not 2021 when the loss
occurred). Your loss was sustained in 2022
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 (2022) or
make an election to deduct the unreimbursed
loss on your tax return for the preceding year
(2021).
If you realize a gain from the
reimbursement on your casualty loss,
CAUTION 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/Disasters.
To make this election for a loss in disaster
year 2022, complete Part I of Section D on your
2021 Form 4684 and attach it to your 2021
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 2022
disaster loss on your 2021 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 2022 disaster loss on your
2021 tax return is October 16, 2023.
Revoking a prior election to deduct loss
in the preceding year. Complete Part II of
Section D if you want to revoke a 2021 disaster
year election to deduct a federally declared
disaster loss in the preceding tax year. Attach
the completed Section D to an amended return

Instructions for Form 4684 (2022)

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.

Qualified disaster losses. A qualified
disaster loss also 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; and
• 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).
• A qualified disaster loss also includes an
individual's casualty or theft of personal-use
property that is attributable to a major disaster
that was declared by the President during the
period between January 1, 2020, and February
25, 2021. Also, this disaster must have an
incident period that began on or after December
28, 2019, and on or before December 27, 2020.
However, this change does not include those
losses attributable to a major disaster that has
been declared only by reason of COVID-19.
For specific instructions for reporting these
qualified disaster losses, see Line 11 and
Line 15, later. See 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

-3-

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
1040, 1040-SR, or 1040-NR, line 12.
Nonresident aliens cannot claim the
standard deduction. However, there is
CAUTION 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.

!

The alternative minimum tax
adjustment for the standard deduction
CAUTION is made retroactively inapplicable to net
qualified disaster losses. See Taxpayers who
also file the 2022 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.

Because the personal casualty losses
claimed under this special procedure
CAUTION 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

assigned by FEMA in the space provided above
line 1 on your 2022 Form 4684. A list of
federally declared disasters and FEMA disaster
declaration numbers is available at FEMA.gov/
Disasters.
The FEMA disaster declaration number
consists of the letters “DR” and four numbers,
or the letters “EM” and four numbers. For
example, enter “DR-4593” in the respective
entry spaces for the Washington Severe Winter
Storm.

DRAFT AS OF
November 1, 2022

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

Example. Your main home and its contents
were completely destroyed in 2022 by a
tornado in a federally declared disaster area. In
2022, you received insurance proceeds of
$200,000 for the home, $25,000 for
unscheduled personal property in your home,
$5,000 for jewelry, and $10,000 for a stamp
collection.
No gain is recognized on the $25,000 of
insurance proceeds you received for the
unscheduled personal property.

The jewelry and stamp collection were kept
in your home and were scheduled property on
your insurance policy. Your home and its
replacement contents are considered a single
item of property for the purpose of recognizing
gain on the involuntary conversion 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 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.
To postpone the gain, you must purchase
the replacement property before 2027. 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
You can no longer claim a loss on a
deposit in an insolvent or bankrupt
CAUTION 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.

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.
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
-4-

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.

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;

Instructions for Form 4684 (2022)

• 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.

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.

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
If you sustained a qualified disaster loss,
including those sustained in 2022, 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.

DRAFT AS OF
November 1, 2022

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 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, Selling Your Home.

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.

Instructions for Form 4684 (2022)

The FMV of property after a theft is zero if
the property isn't 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 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
-5-

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.

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.

Taxpayers who also file the 2022 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.

that amount on line 27, and enter “See attached
statement” above line 27.
If you used the simplified method to
determine your deductible expenses for
business use of your home for 2022, figure the
casualty or theft loss for the home office in
Section A instead of on Form 8829 and
Section B.

DRAFT AS OF
November 1, 2022

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, 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.” Do not also
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 2022
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.

Property Used in a Passive Activity

Line 17

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.

Estates and trusts figure AGI in the same way
as individuals, except that the costs of
administration are allowed in figuring AGI.

Losses From Ponzi-Type
Investment Schemes

If you filed Schedule A to itemize your
deductions, then don’t make this adjustment.

Section B—Business and
Income-Producing Property

You can no longer claim any
miscellaneous itemized deductions. As
CAUTION 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.

!

!

CAUTION

The rules for electing large partnerships
have been repealed and are not
applicable.

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.

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.

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.

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.

Home Used for Business or
Rented Out

Section 179 Property of a
Partnership or S Corporation

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

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.

-6-

Instructions for Form 4684 (2022)

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.

measure the loss separately for the building and
for the trees.

Line 30

Line 28

Include in the total any amounts from the
additional sheet you attached because you had
more than two casualties or thefts on line 29.

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 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.

Line 31

DRAFT AS OF
November 1, 2022

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/IRS-Prior/
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.

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.
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,

Instructions for Form 4684 (2022)

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.
If you are claiming a theft loss from a
TIP 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)
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.

Part II, Column (c)
On line 29, enter the part of line 22 that is from
property held for 1 year or less.
On line 34, enter the part of line 22 that is
from property held for more than 1 year.

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.
Next to that line, enter “Form 4684.”

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 13d. S corporations, enter on
Form 1120-S, 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 35
Include in the total any amounts from the
additional sheet you attached because you had
more than two casualties or thefts.

Line 38a
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.
Form 1040, 1040-SR, or 1040-NR filers.
Enter this amount on your Schedule 1 (Form
1040), line 4. Next to that line, enter “4684.”
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.

-7-

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).
• Revenue Procedure 2011-58, 2011-50 I.R.B.
849 (available at IRS.gov/IRB/
2011-50_IRB#RP-2011-58).

Procedure 2009-20 (as modified by Revenue
Procedure 2011-58) is filed, or the death of the
lead figure occurs, whichever is later.

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).

the spaces provided. You are agreeing to these
statements and declarations when you sign
your tax return. The 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

DRAFT AS OF
November 1, 2022

Don't fill out Section C if you don't
qualify to use the procedures in
CAUTION 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.
For definitions of responsible group,
specified fraudulent arrangement, and qualified
investor, see Section 4 of Revenue Procedure
2009-20.

Line 41
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

Line 45

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.

Part I—Election Statement

Line 46

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
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).

Line 49
Enter the amount of potential insurance/SIPC
recovery (defined earlier).

Line 51
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.
If you had other casualties or thefts, fill

TIP 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
-8-

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.
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.
You can revoke the prior election on or
before the date that is 90 days after the due
date for making the election.
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 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

Instructions for Form 4684 (2022)

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 . . . . . .

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.

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.

DRAFT AS OF
November 1, 2022

Instructions for Form 4684 (2022)

-9-