Instructions For Form 4684 - Casualties And Thefts

Loss on each item figured separately.

property used in a trade or business or for

than 1 year, you may have to recapture

Unlike a casualty loss to personal use

income-producing purposes. Use one

part or all of the gain as ordinary income.

real estate, in which all improvements are

Section B, Part II, to combine all Sections

See the instructions for Form 4797, Part

considered one item, a casualty loss to

B, Part I.

III, for more information on the types of

business or income-producing property

property subject to recapture. If recapture

For details on the treatment of

must be figured separately for each item.

applies, complete Form 4797, Part III, and

casualties or thefts to business or

For example, if casualty damage occurs

this line, instead of Form 4684, line 37.

income-producing property, including

to both a building and to trees on the

rules on the loss of inventory through

Line 41a

same piece of real estate, measure the

casualty or theft, see Pub. 547.

Taxpayers, other than partnerships and S

loss separately for the building and for the

If you had a casualty or theft loss

corporations, if Form 4797 is not

trees.

involving a home you used for business

otherwise required, enter the amount from

Line 31

or rented out, your deductible loss may be

this line on page 1 of your tax return, on

limited. First, complete Form 4684,

If the amount on line 31 includes losses

the line identified as from Form 4797.

Section B, lines 22 through 29. If the loss

on property held 1 year or less, and

Next to that line, enter “Form 4684.”

involved a home used for a business for

losses on property held for more than 1

which you are filing Schedule C (Form

year, you must allocate the amount

Paperwork Reduction Act Notice. We

1040), Profit or Loss From Business,

between lines 32 and 37 according to

ask for the information on this form to

figure your deductible casualty or theft

how long you held each property. Enter

carry out the Internal Revenue laws of the

loss on Form 8829, Expenses for

on line 32 all gains and losses on

United States. You are required to give us

Business Use of Your Home. Enter on

property held 1 year or less. Enter on line

the information. We need it to ensure that

Form 4684, line 30, the deductible loss

37 all gains and losses on property held

you are complying with these laws and to

from Form 8829, line 33, and “See Form

more than 1 year, except as provided in

allow us to figure and collect the right

8829” above line 30. For a home you

the instructions for line 36.

amount of tax.

rented out or used for a business for

Part II, Column (a)

which you are not filing Schedule C (Form

You are not required to provide the

Use a separate line for each casualty or

information requested on a form that is

1040), see section 280A(c)(5) to figure

theft.

your deductible loss. Attach a statement

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

showing your computation of the

Part II, Column (b)(i)

deductible loss, enter that amount on line

control number. Books or records relating

Enter the part of line 31 from trade,

to a form or its instructions must be

30 and “See attached statement” above

business, rental, or royalty property (other

line 30.

retained as long as their contents may

than property you used in performing

become material in the administration of

services as an employee).

any Internal Revenue law. Generally, tax

Note. A gain or loss from a casualty or

returns and return information are

Part II, Column (b)(ii)

theft of property used in a passive activity

confidential, as required by section 6103.

Enter the part of line 31 from

is not taken into account in determining

The time needed to complete and file

income-producing property and from

the loss from a passive activity unless

this form will vary depending on individual

property you used in performing services

losses similar in cause and severity recur

circumstances. The estimated burden for

as an employee. Income-producing

regularly in the activity. See Form 8582,

individual taxpayers filing this form is

property is property held for investment,

Passive Activity Loss Limitations, and its

approved under OMB control number

such as stocks, notes, bonds, gold, silver,

instructions for details.

1545-0074 and is included in the

vacant lots, and works of art.

Section 179 Property of a

estimates shown in the instructions for

Line 34

Partnership or S corporation

their individual income tax return. The

If Form 4797, Sales of Business Property,

estimated burden for all other taxpayers

Partnerships (other than electing large

is not otherwise required, enter the

who file this form is shown below.

partnerships) and S corporations that

amount from this line on page 1 of your

have a casualty or theft involving property

Recordkeeping . . . . . . . . 1 hr., 58 min.

tax return, on the line identified as from

for which the section 179 expense

Form 4797. Next to that line, enter “Form

deduction was previously claimed and

Learning about the law or

4684.”

passed through to the partners or

the form . . . . . . . . . . . . .

27 min.

shareholders must not use Form 4684 to

Line 35

Preparing the form . . . . . 1 hr., 7 min.

report the transaction. Instead, see the

Estates and trusts, enter on the “Other

Instructions for Form 4797 for details on

Copying, assembling,

deductions” line of your tax return.

how to report it. Partners and S

and sending the form to

Partnerships (except electing large

corporation shareholders who receive a

the IRS . . . . . . . . . . . . . .

34 min.

partnerships), enter on Form 1065,

Schedule K-1 reporting such a transaction

Schedule K, line 13d. Electing large

should see the Instructions for Form 4797

If you have comments concerning the

partnerships, enter on Form 1065-B, Part

for details on how to figure the amount to

accuracy of these time estimates or

II, line 11. S corporations, enter on Form

enter on Form 4684, line 20.

suggestions for making this form simpler,

1120S, Schedule K, line 12d. Next to that

we would be happy to hear from you. See

Line 23

line, enter “Form 4684.”

the instructions for the tax return with

Cost or adjusted basis usually means

Line 36

which this form is filed.

original cost plus improvements, minus

If you had a casualty or theft gain from

depreciation allowed or allowable

certain trade, business, or

(including any section 179 expense

income-producing property held more

deduction), amortization, depletion, etc.

Special rules apply to property received

as a gift or inheritance. See Pub. 551 for

details.

Line 24

See the instructions for line 3.

Line 25

See the instructions for line 4.

Lines 26 and 27

See the instructions for lines 5 and 6 for

details on determining FMV.

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Instructions For Form 4684 - Casualties And Thefts - 2005 Page 4

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