Instructions For Form 4684 - Casualties And Thefts

return for the preceding year that contains a

unscheduled personal property that was part

to the loss is federally insured. The maximum

revocation statement. The revocation

of the contents of the home.

amount you can claim is $20,000 ($10,000 if

statement must include the following

you are married filing separately). Your

2. Any other insurance proceeds you

information:

deduction is reduced by any expected state

receive for the home or its contents are

insurance proceeds and is subject to the

1. A statement clearly showing that the

treated as received for a single item of

2%-of-adjusted-gross-income (AGI) limit.

election is being revoked;

property, and any replacement property you

purchase that is similar or related in service

If you elect to deduct the estimated loss

2. The name or a description of the

or use to the home or its contents is treated

disaster and date or dates of the disaster for

as a casualty loss or as an ordinary loss, you

as similar or related in service or use to that

which the election was originally claimed;

can't claim the same loss as a nonbusiness

single item of property. Therefore, you can

bad debt. If the estimated loss deducted is

and

choose to recognize gain only to the extent

less than the actual loss, you can claim the

3. The address, including the city or

the insurance proceeds treated as received

difference as a nonbusiness bad debt for the

town, county or parish, state, and zip code,

for that single item of property exceed the

year in which the final determination of the

where the damaged property was located at

cost of the replacement property.

loss occurs. A nonbusiness bad debt is

the time of the disaster and for which you

deducted on Schedule D (Form 1040),

3. If you choose to postpone any gain

originally claimed the election.

from the receipt of insurance or other

Capital Gains and Losses, as a short-term

Your amended return eliminating the

reimbursement for your main home or any of

capital loss.

election must be filed on or before the date

its contents, the period in which you must

If you are a 1% or more owner or an

that is 90 days after the due date for making

purchase replacement property is extended

officer of the financial institution, or are

the election and on or before the date you

until 4 years after the end of the first tax year

related to any such owner or officer, you

file any return or amended return for the year

in which any part of the gain is realized.

can't deduct the loss as a casualty loss or as

that includes the disaster loss.

For details on how to postpone gain, see

an ordinary loss. See chapter 4 of Pub. 550

Your amended return (eliminating the

for the definition of “related.”

Pub. 547.

previous disaster loss election) should

Example. Your main home and its

If you elect to deduct the loss as a

refigure your tax liability as a result of

contents were completely destroyed in 2017

casualty loss or as an ordinary loss and you

revoking the election. You must pay or make

by a tornado in a federally declared disaster

have more than one account in the same

arrangements to pay any tax and interest

area. In 2017, you received insurance

financial institution, you must include all your

due as a result of the revocation.

proceeds of $200,000 for the home, $25,000

accounts. Once you make the election, you

Complete Part II of Section D if you want

for unscheduled personal property in your

can't change it without permission from the

to revoke a 2018 disaster year election to

home, $5,000 for jewelry, and $10,000 for a

IRS. See Notice 89-28, 1989-1 C.B. 667, for

deduct a federally declared disaster loss in

stamp collection. The jewelry and stamp

more details.

the preceding tax year. Attach the completed

collection were kept in your home and were

Section D to an amended return for the

To elect to deduct the loss as a casualty

scheduled property on your insurance policy.

preceding year (that is, to an amended 2017

loss, complete Form 4684 as follows: On

No gain is recognized on the $25,000 you

return for the revocation of a 2018 disaster

line 1, enter the name of the financial

received for the unscheduled personal

year election). See

Section D—Election To

institution and “Insolvent Financial

property. If you reinvest the remaining

Deduct Federally Declared Disaster Loss in

Institution.” Skip lines 2 through 9. Enter the

proceeds of $215,000 in a replacement

Preceding Tax

Year, later.

amount of the loss on line 10, and complete

home, any type of replacement contents

the rest of Section A.

(whether scheduled or unscheduled), or

Home made unsafe by disaster. If your

home was located in a disaster area and

both, you can elect to postpone any gain on

If, in a later year, you recover an amount

your state or local government ordered you

your home, jewelry, or stamp collection. If

you deducted as a loss, you may have to

you reinvest less than $215,000, any gain is

to tear it down or move it because it was no

include in your income the amount recovered

longer safe to use as a home due to the

recognized only to the extent $215,000

for that year. For details, see Recoveries in

exceeds the amount you reinvest in a

disaster, the resulting loss in value is treated

Pub. 525, Taxable and Nontaxable Income.

replacement home, any type of replacement

as a disaster loss. The order for you to tear

down or move the home must have been

contents (whether scheduled or

Damage From Corrosive

unscheduled), or both. To postpone gain,

issued within 120 days after the area was

Drywall

officially declared a disaster area.

you must purchase the replacement property

before 2022. Your basis in the replacement

If you suffered property losses due to the

For purposes of figuring the disaster loss,

property equals its cost decreased by the

effects of certain imported drywall installed in

use the value of your home before you

amount of any postponed gain.

homes between 2001 and 2009, under a

moved it or tore it down as its fair market

special procedure, you may be able to claim

value after the casualty.

Special Treatment for

a casualty loss deduction for amounts you

More information. See Pub. 547 for more

Losses on Deposits in

paid to repair damage to your home and

information about disaster losses.

household appliances that resulted from

Insolvent or Bankrupt

corrosive drywall. For details, see Special

Gains Realized on Homes

Financial Institutions

Procedure for Damage From Corrosive

in Disaster Areas

Drywall under Casualty in Pub. 547.

If you are an individual who incurred a loss

The following rules apply if your main home

from a deposit in a bank, credit union, or

Specific Instructions

was located in an area declared by the

other financial institution because of the

President of the United States to warrant

bankruptcy or insolvency of that institution

federal assistance as the result of a disaster,

and you can reasonably estimate your loss,

Which Sections To

and the home or any of its contents were

you can elect to deduct the loss as:

Complete

damaged or destroyed due to the disaster.

A casualty loss to personal use property

These rules also apply to renters who

on Form 4684, or

Use Section A to figure casualty or theft

receive insurance proceeds for damaged or

An ordinary loss (miscellaneous itemized

gains and losses for property that isn't used

destroyed property in a rented home that is

deduction) on Schedule A (Form 1040),

in a trade or business or for

their main home.

Itemized Deductions, line 23, or Form

income-producing purposes. Also use

1040NR, Schedule A, Itemized Deductions,

1. No gain is recognized on any

Section A to figure casualty or theft losses

line 9. You can't elect the ordinary loss

insurance proceeds received for

and gains related to the portion of your home

deduction if any part of the deposits related

used for business if you used the simplified

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Instructions For Form 4684 - Casualties And Thefts - 2017 Page 3

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