4684 Instructions for Form 4684

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2023

Instructions for Form 4684

Department of the Treasury
Internal Revenue Service

Casualties and Thefts

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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.

What’s New

Disaster-related benefits extension. At the time these instructions
were going to print, new legislation, the Federal Disaster Tax Relief Act of
2023, was being considered that would extend the rules for the treatment
of certain disaster-related personal casualty losses.
To see if this legislation was enacted and how these rules would be
extended, 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.
If applicable, you may have to file an amended return on Form

TIP 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 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 2023 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 2023 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 2023, 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 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.

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Cat. No. 12998Z

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.

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.

Related expenses. The related expenses you have due to a casualty or
theft, such as expenses for the treatment of personal injuries or for the
rental of a car, aren't deductible as casualty or theft losses.
Costs for protection against future casualties aren't deductible but
should be capitalized as permanent improvements. An example would
be the cost of a levee to stop flooding.

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.

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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

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.

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.

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.

Gain on Reimbursement

If the amount you receive in insurance or other reimbursement is more
than the cost or other basis of the property, you have a gain. If you have a
gain, you may have to pay tax on it, or you may be able to postpone the
gain.

Don't report the gain on damaged, destroyed, or stolen property if you
receive property that is similar or related to it in service or use. Your basis
in the new property is the same as your basis in the old property.

Any tangible replacement property held for use in a trade or business
is treated as similar or related in service or use to property held for use in
a trade or business or for investment if:
• The property you are replacing was damaged or destroyed in a
disaster, and
• The area in which the property was damaged or destroyed was
declared by the President of the United States to warrant federal
assistance because of that disaster.

Generally, you must recognize the gain if you receive unlike property
or money as reimbursement. But you can generally choose to postpone
all or part of the gain if, within 2 years of the end of the first tax year in
which any part of the gain is realized, you purchase:
• Property similar or related in service or use to the damaged,
destroyed, or stolen property; or
• A controlling interest (at least 80%) in a corporation owning such
property.

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.

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.

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 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.

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 theft losses to federal casualty losses applies
CAUTION where you have personal casualty gains to the extent the losses
don’t exceed your gains.

!

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.

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
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Instructions for Form 4684 (2023)

When To Deduct a Loss

Revoking a prior election to deduct loss in the preceding year.
Complete Part II of Section D if you want to revoke a 2022 disaster year
election to deduct a federally declared disaster loss in the preceding tax
year. Attach the completed Section D to an amended return for the
preceding year (that is, to an amended 2022 return for the revocation of a
2023 disaster year election). See Section D—Election To Deduct
Federally Declared Disaster Loss in Preceding Tax Year, later.

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.

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.

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.

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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.

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.

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.

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.

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 a list of federally declared disasters and disaster areas, see

TIP FEMA.gov/Disasters.

To determine the amount to deduct for a disaster loss, you must take
into account as reimbursements any benefits you received or which you
have a reasonable possibility of receiving from federal or state programs
to restore your property.

Disaster year. The disaster year is the tax year in which you sustained
the loss attributable to a federally declared disaster. Generally, a disaster
loss is sustained in the year the disaster occurred. However, a disaster
loss may also be sustained in a year after the disaster occurred. For
example, if a claim for reimbursement exists for which there is a
reasonable prospect of recovery, no part of the loss for which
reimbursement may be received is sustained until it can be ascertained
with reasonable certainty whether you will be reimbursed.
Example. In December 2022, 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 2023 when your insurance company reimbursed you for only
half of your loss. The disaster year is 2023 (not 2022 when the loss
occurred). Your loss was sustained in 2023 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 (2023) or make an election to deduct the unreimbursed loss on your
tax return for the preceding year (2022).

!

CAUTION

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 Increased standard deduction reporting next
for more information.

If you realize a gain from the reimbursement on your casualty
loss, do not report the gain until the year in which that amount is
received.

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.

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.

1. Enter the amount from Form 4684, line 15, on the dotted line next to
line 16 on Schedule A (Form 1040), or line 7 of Schedule A (Form
1040-NR), and the description “Net Qualified Disaster Loss.”
2. Also, enter on the dotted line next to line 16 of Schedule A (Form
1040) or line 7 of Schedule A (Form 1040-NR), your standard
deduction amount and the description “Standard Deduction
Claimed With Qualified Disaster Loss.”

To make this election for a loss in disaster year 2023, complete Part I
of Section D on your 2021 Form 4684 and attach it to your 2022 original
or amended return that claims the disaster loss. See Section D—Election
To Deduct Federally Declared Disaster Loss in Preceding Tax Year, later.

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.

You must make an election to deduct a 2023 disaster loss on your
2022 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 2023 disaster loss on your 2022 tax return is October 15, 2024.

Instructions for Form 4684 (2023)

-3-

Special Treatment for Losses on
Deposits in Insolvent or Bankrupt
Financial Institutions

Nonresident aliens cannot claim the standard deduction.
However, there is an exception. Students or business
CAUTION 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.

!

You can no longer claim a loss on a deposit in an insolvent or
bankrupt financial institution as a personal casualty or theft loss
CAUTION unless the exception mentioned under the Caution under Losses
You Can Deduct, earlier, applies. See Pub. 547 for more information.

!

The alternative minimum tax adjustment for the standard
deduction is made retroactively inapplicable to net qualified
CAUTION disaster losses. See Taxpayers who also file the 2023 Form
6251, Alternative Minimum Tax for Individuals, later, for more information.

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!

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.

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.

Because the personal casualty losses claimed under this special
procedure are not attributable to a federally declared disaster,
CAUTION they're only deductible to the extent such losses don't exceed
your personal casualty gains.

!

Specific Instructions

1. No gain is recognized on any insurance proceeds received for
unscheduled personal property that was part of the contents of the
home.

Which Sections To Complete

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.

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.

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.

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.

For details on how to postpone gain, see Pub. 547.
Example. Your main home and its contents were completely
destroyed in 2023 by a tornado in a federally declared disaster area. In
2023, 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.

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.

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.

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.

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.

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.

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.

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.

To postpone the gain, you must purchase the replacement property
before 2028. Your basis in the replacement property equals its cost
decreased by the amount of any postponed gain.

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 2023 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,
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Instructions for Form 4684 (2023)

$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.

enter “DR-4712” in the respective entry spaces for the Tennesee Severe
Thunderstorms and Possible Strong Tornadoes.

Line 1

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.

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.

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Line 2

Line 4

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.

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.

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.

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.

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.

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.

Types of reimbursements. Insurance is the most common way to be
reimbursed for a casualty or theft loss, but if:
• Part of a federal disaster loan is forgiven, the part you don't have to
pay back is considered a reimbursement;
• The person who leases your property must make repairs or must
repay you for any part of a loss, the repayment and the cost of the
repairs are considered reimbursements;
• A court awards you damages for a casualty or theft loss, the amount
you are able to collect, minus lawyers' fees and other necessary
expenses, is a reimbursement;
• You accept repairs, restoration, or cleanup services provided by
relief agencies, it is considered a reimbursement; or
• A bonding company pays you for a theft loss, the payment is also
considered a reimbursement.

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.

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.

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.

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

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

Instructions for Form 4684 (2023)

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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.

determining the amount of your casualty and theft losses for your home
and personal belongings.
Safe harbor reporting requirements for Form 4684. If you use
one of the safe harbor methods provided in Revenue Procedure
2018-08, you must attach a statement to Form 4684 stating that you
used Revenue Procedure 2018-08 to determine the amount of your
casualty loss. Include the specific safe harbor method used. When
completing Form 4684, do not enter an amount on line 5 or line 6 for
each property. Instead, enter the decrease in the FMV determined in the
relevant safe harbor method on line 7.

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.

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Net loss. If line 13 is less than line 14 and you have qualified disaster
losses subject to the $500 reduction on line 11 on any Form(s) 4684:
• Subtract line 13 from line 14. Enter the smaller of this difference or
the amount on line 12 of the Form 4684 listing those qualified
disaster losses. The amount is your net qualified disaster loss. If you
are itemizing your deductions, enter the amount on line 16 of
Schedule A (Form 1040), or line 7 of Schedule A (Form 1040-NR),
and “Net Qualified Disaster Loss.” If you are claiming the increased
standard deduction, enter the amount on line 16 of Schedule A
(Form 1040), or line 7 of Schedule A (Form 1040-NR), and “Net
Qualified Disaster Loss.” Also, do not include this amount on line 15
of Schedule A (Form 1040), or line 6 of Schedule A (Form
1040-NR), if you are not itemizing your deductions.

Line 11

If you sustained a qualified disaster loss, including those sustained in
2023, 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.
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

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

Enter on this line the amounts from line 4 of all Forms 4684 reporting a
gain.

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 2023 Form 6251, Alternative
Minimum Tax for Individuals, next.

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.

Don’t complete the rest of this section if all your personal casualty
and theft losses are qualified disaster losses subject to the $500
reduction.

If line 13 is less than line 14 and you have no qualified disaster losses
subject to the $500 reduction on line 11 of your Form 4684, enter zero
and go to line 16 and complete the rest of the section.
Taxpayers who also file the 2023 Form 6251, Alternative
Minimum Tax for Individuals. If you file Schedule A (Form 1040) or
Schedule A (Form 1040-NR) just to claim an increased standard
deduction on Form 1040, 1040-SR, or 1040-NR, due to a loss you
suffered related to property in a federally declared disaster area, enter
zero on Form 6251, line 2a. Next, include the amount of your standard
deduction (before it is increased by any net qualified disaster loss) in the
total on line 3. This is the amount you listed on the dotted line next to
Schedule A (Form 1040), line 16 or Schedule A (Form 1040-NR), line 7.

If you 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.

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

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
You can no longer claim any miscellaneous itemized deductions.
As a result, business casualty and theft losses of property used
CAUTION in performing services as an employee cannot be deducted or
applied in the netting process to offset gains.

Line 15

!

Note. You will complete line 15 differently depending on whether you
have a net gain or loss and whether you have a qualified disaster loss.
Net gain. If line 13 is more than line 14, you have a net gain. Report the
gain as follows.
• Combine your short-term gains with your short-term losses and
include the net short-term gain or (loss) on Schedule D (Form
1040), line 4. Estates and trusts include this amount on Schedule D
(Form 1041), line 4.
• Combine your long-term gains with your long-term losses and
include the net long-term gain or (loss) on Schedule D (Form 1040),
line 11. Estates and trusts include this amount on Schedule D (Form
1041), line 11.

!

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

CAUTION

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
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Instructions for Form 4684 (2023)

income-producing purposes. Use one Section B, Part II, to combine all
Sections B, Part I.

Line 19

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 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.

Home Used for Business or Rented Out

Line 20

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If you had a casualty or theft loss involving a home you used for business
or rented out, your deductible loss may be limited. First, complete Form
4684, Section B, lines 19 through 26. If the loss involved a home used for
a business for which you are filing Schedule C (Form 1040), Profit or
Loss From Business, figure your deductible casualty or theft loss on
Form 8829, Expenses for Business Use of Your Home (if you are using
Form 8829). Enter on Form 4684, line 27, the deductible loss from Form
8829, line 35, and “See Form 8829” above line 27. For a home you
rented out or used for a business for which you aren't filing Schedule C
(Form 1040), see section 280A(c)(5) to figure your deductible loss.
Attach a statement showing your computation of the deductible loss,
enter that amount on line 27, and enter “See attached statement” above
line 27.

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.

If you used the simplified method to determine your deductible
expenses for business use of your home for 2023, figure the casualty or
theft loss for the home office in Section A instead of on Form 8829 and
Section B.

Property Used in a Passive Activity

A gain or loss from a casualty or theft of property used in a passive
activity isn't taken into account in determining the loss from a passive
activity unless losses similar in cause and severity recur regularly in the
activity. See Form 8582, Passive Activity Loss Limitations, and its
instructions for details.

Losses From Ponzi-Type Investment Schemes

Line 21

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).

See the instructions for line 3, earlier.

Line 22
See the instructions for line 4, earlier.

Lines 23 and 24

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.

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.

For more information, see the instructions for Section C, later, and the
above revenue ruling and revenue procedures.

Line 28

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.

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.

Section 179 Property of a Partnership or S
Corporation
Partnerships and S corporations that have a casualty or theft involving
property for which the section 179 expense deduction was previously
claimed and passed through to the partners or shareholders must not
use Form 4684 to report the transaction. Instead, see the Instructions for
Form 4797 for details on how to report it. Partners and S corporation
shareholders who receive a Schedule K-1 reporting such a transaction
should see the Instructions for Form 4797 for details on how to figure the
amount to enter on Form 4684, line 20.

Instructions for Form 4684 (2023)

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.

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Part II, Column (a)

Line 38a

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.

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.

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.

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.

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Section C—Theft Loss Deduction for Ponzi-Type
Investment Scheme Using the Procedures in
Revenue Procedure 2009-20

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

TIP scheme, enter the name of the individual or entity that
conducted the fraudulent arrangement.

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.

Part II, Column (b)(i)

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

If you meet both conditions, fill out Section C in lieu of Appendix A in
Revenue Procedure 2009-20.

Part II, Column (b)(ii)

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).

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.

Don't fill out Section C if you don't qualify to use the procedures
in Revenue Procedure 2009-20, as modified by Revenue
CAUTION Procedure 2011-58, or you don't choose to follow them. Instead,
go to the instructions for Section B.

!

On line 34, enter the part of line 22 that is from property held for more
than 1 year.

Line 30

Line 40

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

Enter the initial amount of cash or basis of property that you invested in
the investment arrangement. Don't include any of the following on this
line, line 41, or line 42.
• Amounts borrowed from the responsible group and invested in the
specified fraudulent arrangement, to the extent the borrowed
amounts weren't repaid at the time the theft was discovered.
• Amounts such as fees that were paid to the responsible group and
deducted for federal income tax purposes.
• Amounts reported to you (the qualified investor) as taxable income
that weren't included in gross income on the investor's federal
income tax returns.
• Cash or property that you (the qualified investor) invested in a fund
or other entity (separate from you (the qualified investor) for federal
income tax purposes) that invested in a specified fraudulent
arrangement.

Line 31
If Form 4797, Sales of Business Property, isn't otherwise required, enter
the amount from this line on your Schedule 1 (Form 1040), line 4. 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.”

For definitions of responsible group, specified fraudulent
arrangement, and qualified investor, see Section 4 of Revenue
Procedure 2009-20.

Line 33

Line 41

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.

Enter the amounts of cash or the basis of property that you invested after
you made the initial investment (including amounts reinvested).

Line 42

Line 35

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.

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

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Instructions for Form 4684 (2023)

Section D—Election To Deduct Federally
Declared Disaster Loss in Preceding Tax Year

Discovery year. The discovery year is the tax year when one of the
following occurs.
• The indictment, information, or complaint described in section
4.02(1) or (2) of Revenue Procedure 2009-20 (as modified by
Revenue Procedure 2011-58) is filed.
• The complaint or similar document described in section 4.02(3) of
Revenue Procedure 2009-20 (as modified by Revenue Procedure
2011-58) is filed, or the death of the lead figure occurs, whichever is
later.

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.

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Part I—Election Statement

Line 44

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.

Enter the total amount of cash or property that you withdrew from the
investment arrangement in all years (whether designated as income or
principal).

Line 45

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.

This is the amount of your investment that is eligible for a deduction
before any actual or potential recoveries are taken into account.

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.

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.

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.

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.

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.

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.

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.

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).

You aren't required to provide the information requested on a form
that is subject to the Paperwork Reduction Act unless the form displays a
valid OMB control number. Books or records relating to a form or its
instructions must be retained as long as their contents may become
material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section
6103.

Line 49

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.

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.

TIP

If you had other casualties or thefts, fill out a separate Section B,
Part I, for them.

Part II
Read the statements and declarations in this part carefully. Enter the
required information in the spaces provided. You are agreeing to these
statements and declarations when you sign your tax return. The
information you enter in this part will be used to verify the fraudulent
investment arrangement.

Instructions for Form 4684 (2023)

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
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happy to hear from you. See the instructions for the tax return with which
this form is filed.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
November 13, 2023

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Instructions for Form 4684 (2023)