2023

Instructions for Form 4684

Casualties and Thefts

Department of the Treasury

Internal Revenue Service

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 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 

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.

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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.

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.

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 

Jan 8, 2024 Cat. No. 12998Z
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.

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 and must have ended no later than January 26, 2021. 

The definition of a qualified disaster loss does not extend to any 

major disaster that has been declared only by reason of COVID-19 

(because the incident period for COVID-19 extended beyond 

January 26, 2021). Thus, given that the incident period for 

COVID-19 generally ran from January 20, 2020 to May 11, 2023, a 

loss due to COVID-19 is not a qualified disaster loss.

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 theft losses to federal casualty losses applies 

where you have personal casualty gains to the extent the losses 

don’t exceed your gains.

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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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.

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

• 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.

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.

2 Instructions for Form 4684 (2023)
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 and disaster areas, see 

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).

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.

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 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.

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.

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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.

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.

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 and must have ended 

no later than January 26, 2021. The definition of a qualified disaster 

loss does not extend to any major disaster that has been declared 

only by reason of COVID-19 (because the incident period for 

COVID-19 extended beyond January 26, 2021). Thus, given that the 

incident period for COVID-19 generally ran from January 20, 2020 

to May 11, 2023, a loss due to COVID-19 is not a qualified disaster 

loss.

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.

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.”

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 

Instructions for Form 4684 (2023) 3
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 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 is made retroactively inapplicable to net qualified 

disaster losses. See Taxpayers who also file the 2023 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.

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.

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 may 

have to 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.

See Publication 523, Selling Your Home, for more information on gain 

that may be excluded on a sale, including the receipt of insurance 

proceeds for a destruction of your home. Also see Publication 547, 

Casualties, Disasters, and Thefts, for more information on rules for 

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postponing gain, including rules for when the main home is located in a 

disaster area.

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.

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 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.

Because the personal casualty losses claimed under this special 

procedure 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

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 

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4 Instructions for Form 4684 (2023)
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, 

enter “DR-4712” in the respective entry spaces for the Tennesee Severe 

Thunderstorms and Possible Strong Tornadoes.

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;

• 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.

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.

Lines 5 and 6

Fair market value (FMV) is the price at which the property would be sold 

between a willing buyer and a willing seller, each having knowledge of 

the relevant facts. The difference between the FMV immediately before 

the casualty or theft and the FMV immediately after represents the 

decrease in FMV because of the casualty or theft.

The FMV of property after a theft is zero if the property 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 

Instructions for Form 4684 (2023) 5
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 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 

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

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.

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.” 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.

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 2023 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.

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 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 

in performing services as an employee cannot be deducted or 

applied in the netting process to offset gains.

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.

CAUTION

!

6 Instructions for Form 4684 (2023)
Use a separate Form 4684, Section B, Part I, for each casualty or 

theft involving property used in a trade or business or for 

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

Sections B, Part I.

For details on the treatment of casualties or thefts to business or 

income-producing property, including rules on the loss of inventory 

through casualty or theft, see Figuring a Loss in Pub. 547.

Home Used for Business or Rented Out

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.

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

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.

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.

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.

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.

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, measure 

the loss separately for the building and for the trees.

Line 28

If the amount on line 28 includes losses on property held 1 year or less, 

and losses on property held for more than 1 year, you must allocate the 

amount between lines 29 and 34 according to how long you held each 

property. Enter on line 29 all gains and losses on property held 1 year or 

less. Enter on line 34 all gains and losses on property held more than 1 

year, except as provided in the instructions for line 33.

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

and are following the procedures in Revenue Procedure 2009-20, 

2009-14 I.R.B. 749, enter on line 28 the amount from 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.

Instructions for Form 4684 (2023) 7
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 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.

Line 30

Include in the total any amounts from the additional sheet you attached 

because you had more than two casualties or thefts on line 29.

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.”

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.

TIP

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.

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).

Don't fill out Section C if you don't qualify to use the procedures 

in 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.

CAUTION

!

8 Instructions for Form 4684 (2023)
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.

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).

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.

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 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.

TIP

Section D—Election To Deduct Federally 

Declared Disaster Loss in Preceding Tax Year

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

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 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 

Instructions for Form 4684 (2023) 9
happy to hear from you. See the instructions for the tax return with which 

this form is filed.

10 Instructions for Form 4684 (2023)