Form 4684 is an IRS form used to report losses from casualties and thefts that may be deductible for taxpayers who itemize deductions, such as disasters and thefts resulting from certain circumstances. Special considerations are in place for those affected by federally declared disasters.
What is Form 4684?
Form 4684 is an Internal Revenue Service (IRS) form for reporting gains or losses incurred from casualties and thefts, which can be deductible for taxpayers who itemize deductions. These event types may include fires, floods, and other disasters, with the tax year equating to the year of discovery in the case of theft. There are special provisions for federally declared disaster areas, allowing deduction in the previous tax year, and allowing additional tax advantages. Filing Form 4684 may assist those suffering from losses caused by corrosive drywall, caustic pyrrhotite concrete, financial institutions which become bankrupt or insolvent, Ponzi schemes, and other disasters or events. It is important to remember that not all losses qualify, including those from termite infestation or car accidents caused by the taxpayer.
IRS Form 4684 – Who Needs to Fill It Out?
Form 4684 is needed by taxpayers to report gains or losses from casualties and thefts, which may be deductible for those who itemize deductions. This includes losses from fires, floods, and other disasters that happen in the tax year of loss discovery. For individuals affected by a federally declared disaster, no itemization is needed in order to file Form 4684, in order to claim the difference in home value pre- and post-event. Losses not attributable to a federally-declared disaster can still be used to offset any gains. However, losses related to personal injuries are not deductible, nor are casualties and thefts related to businesses. The form is available online, and for federally declared disaster areas, special provisions exist to make these losses deductible in the previous tax year.
Step-by-Step: Form 4684 Instructions For Filling Out the Document
Filing Form 4684 is the Internal Revenue Service (IRS) way of reporting gains and losses resulting from casualties – like floods, fires, and other disasters – and thefts, which may be deductible for taxpayers who itemize deductions in the tax year they happened or were discovered in the case of theft. key takeaways include that taxpayers need not itemize deductions to qualify in disaster areas and losses must come as sudden, unexpected, or unusual events, excluding termite infestation, mold/fungus growth, and events caused by willful negligence. Homeowners who suffered property loss and damages can claim a deduction if building authority notification was provided within 120 days. Non-qualified losses can be deductible in cases like Ponzi schemes and insolvent financial institutions to offset gains, but not for business property losses or personal injuries. Once determined, complete the form and attach to your return or an amended return to apply.
Below, we present a table that will help you understand how to fill out Form 4684.
| Information Required for Filing Form 4684 | Details |
|---|---|
| Reporting Event | Gains and losses from casualties (e.g., floods, fires, disasters) and thefts |
| Deductibility | Deductible for taxpayers who itemize deductions in the tax year of the event |
| Itemization Requirement | Not required for taxpayers in disaster areas |
| Eligible Losses | Sudden, unexpected, or unusual events (excludes termite infestation, mold/fungus growth, and willful negligence) |
| Building Authority Notification | Property loss deduction if notification provided within 120 days |
| Non-Qualified Losses | Deductible in cases like Ponzi schemes and insolvent financial institutions (not for business property losses or personal injuries) |
| Form Submission | Complete the form and attach to your tax return or amended return |
Do You Need to File Form 4684 Each Year?
Do You Need to File Form 4684: Casualties and Thefts Each Year? Form 4684 is used to report gains or losses from casualties and thefts and is typically filed annually. Taxpayers who live in a federally declared disaster area do not need to itemize deductions in order to file the form. Special provisions exist for losses attributable to major disasters within the calendar year and can be deducted in the preceding year. Additionally, the IRS has extended certain provisions for losses due to a major disaster related to COVID-19 for the 2021 tax year. To easily file Form 4684, be sure to have all relevant information and documentation on-hand to provide to the IRS and seek out guiding resources to ensure the form is accurately completed and submitted.
Download the official IRS Form 4684 PDF
On the official IRS website, you will find a link to download Form 4684: Casualties and Thefts. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 4684
Sources:
https://www.irs.gov/forms-pubs/about-form-4684
https://www.irs.gov/instructions/i4684
