Form 4684, Casualties and Thefts, is the IRS form you use to figure and report a loss from a fire, storm, flood, theft or similar event. For personal-use property, a loss is only deductible if it's attributable to a federally declared disaster, and it's then cut by $100 per casualty and by 10% of your adjusted gross income. Business and income-producing property follows different rules, and some theft losses from scams entered into for profit can still be claimed.
That first rule is the one most people miss, because it came in for tax years beginning after 2017 and quietly removed the deduction for an ordinary burglary or a burst pipe at home. Everything below comes from the IRS instructions for Form 4684 for 2025, and the figures are as of October 2026.
The three kinds of disaster loss
The instructions split disaster-related losses into three types. They all refer to federally declared disasters, meaning a major disaster or emergency declaration by the President under the Stafford Act, but the rules for each differ.
| Type | What it covers | What it unlocks |
|---|---|---|
| Federal casualty loss | A loss of personal-use property attributable to a federally declared disaster, in a state that received the declaration | A casualty loss deduction, after the $100 and 10% of AGI reductions |
| Disaster loss | A loss attributable to a federally declared disaster in a county eligible for public or individual assistance | The deduction plus an election to claim it in the preceding tax year; can cover business property too |
| Qualified disaster loss | A personal-use loss from specific listed disasters, including major disasters declared between January 1, 2020, and September 2, 2025 | No 10% of AGI reduction, a $500 floor instead of $100, and no need to itemize |
The qualified disaster rules were extended by the law known as the One Big Beautiful Bill Act, and the IRS notes they don't cover any major disaster declared only because of COVID-19.
Which section of Form 4684 to use
- Section A: personal-use property, such as your home, car or household goods.
- Section B: business and income-producing property, including a home office or a rental.
- Section C: theft losses from a Ponzi-type investment scheme, if you qualify for and choose the safe harbor in Revenue Procedure 2009-20.
- Section D: the election to deduct a federally declared disaster loss in the year before the disaster.
Scam and theft losses
Theft is where the rules are more generous than people expect. If you were the victim of a financial scam, the IRS says you may claim a theft loss deduction when all three conditions apply: the loss comes from criminal conduct that counts as theft under state law, you have no reasonable prospect of getting the funds back, and the loss arose from a transaction entered into for profit.
That last condition is the dividing line. A fake investment scheme can qualify; a romance scam where you sent cash as a gift, with no profit motive, generally falls back under the personal-use rule. For investment losses reported elsewhere, such as sales on Form 8949, the scam rules don't replace the normal capital loss treatment.
Claiming a disaster loss a year early
If your loss happened in an area that warrants public or individual assistance, you can elect to deduct it on the previous year's return, which can get a refund to you sooner. For a 2025 disaster, you complete Part I of Section D on your 2024 Form 4684 and attach it to an original or amended 2024 return.
The deadline is 6 months after the regular due date of the return for the disaster year, without extensions. For calendar-year individuals, the deadline to take a 2025 disaster loss on a 2024 return is October 15, 2026.
How to work through it
- Check the event: was it a federally declared disaster, and was your area eligible for assistance?
- File an insurance claim first. If you don't file a timely claim, you can only deduct the part of the loss your policy doesn't cover.
- Work out the loss for each item from its cost or other basis and the drop in fair market value caused by the event, then subtract any insurance or other reimbursement. A competent appraisal is the usual way to show fair market value; repair costs can be evidence, but replacement cost isn't the same thing.
- Apply the $100 and 10% of AGI reductions for personal-use property, or the $500 floor for a qualified disaster loss. Your AGI is the figure from your Form 1040 or 1040-SR.
- Carry personal losses to Schedule A. If you don't itemize, a net qualified disaster loss is claimed as an increased standard deduction, entered on the dotted line next to Schedule A, line 16. Business property gains and losses go through Section B and on to Form 4797.
- If you're changing an earlier year, attach Form 4684 to Form 1040-X and explain the adjustment.
What you can't deduct
- Cash or property you misplaced or lost.
- Breakage of china, glassware or furniture under normal conditions.
- Slow damage from termites, moths or disease.
- Related costs such as medical treatment or a rental car after the event.
- Costs to protect against future casualties, such as a levee, which are capital improvements instead.
And if your insurance pays more than your basis in the property, you have a gain, not a loss. You may be able to postpone it by buying similar replacement property within 2 years of the end of the first tax year in which you realize the gain.
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The verdict
If your loss wasn't tied to a federally declared disaster and wasn't a theft from a profit-seeking transaction, Form 4684 probably won't help your personal return, however painful the loss was. If it was, file the insurance claim first, check whether your disaster counts as a qualified disaster loss, and look hard at the prior-year election before October 15, 2026.
Frequently asked questions
What is Form 4684 used for?
It's used to figure and report gains and losses from casualties and thefts, for personal-use property and for business or income-producing property.
Can I deduct a burglary at my home?
Generally not. For tax years beginning after 2017, personal casualty and theft losses are deductible only if they're attributable to a federally declared disaster.
What is the 10% of AGI rule?
Personal casualty losses from a federally declared disaster are reduced by $100 per casualty and by 10% of your adjusted gross income, unless they're a qualified disaster loss.
Can scam victims use Form 4684?
Yes, if the loss came from criminal conduct that counts as theft under state law, there's no reasonable prospect of recovery, and the transaction was entered into for profit.
What is the deadline to claim a 2025 disaster loss on my 2024 return?
For calendar-year individuals, the deadline for electing to take a 2025 disaster loss on the 2024 return is October 15, 2026.
