Purpose of Form
Use Form 4684 to report gains and losses from casualties and thefts. Attach Form 4684 to your tax return.
Losses You May Deduct
You may deduct losses from fire, storm, shipwreck, or other casualty, or theft (for example, larceny, embezzlement, and robbery).
If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Otherwise, you cannot deduct the loss as a casualty or theft loss. However, the part of the loss that is not covered by insurance is still deductible.
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, are not deductible as casualty or theft losses.
Costs for protection against future casualties are not deductible but should be capitalized as permanent improvements. An example would be the cost of a levee to stop flooding.
Losses You May Not 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.
See the knowledge base or instructions for Form 4684 for more detailed information.