Form 4684 Section A - Personal Use
Tax year 2026 adds state-declared disasters as an eligible loss category under the OBBBA expansion. Tax year 2025 still requires a federal declaration (unless you have a qualified disaster loss or personal casualty gains).
Spouses on a joint return are treated as one individual under §165(h)(4)(B). The $100 floor applies once per casualty event, not once per spouse. Filing status otherwise does not change the Form 4684 Section A math.
For tax year 2025, only federally declared disasters and qualified disaster losses are deductible. Starting in tax year 2026, state-declared disasters also qualify. A qualified disaster loss uses a $500 per-event floor and waives the 10 percent of AGI floor.
Usually original cost plus improvements, minus any prior depreciation or casualty-loss deduction. For inherited property, basis is generally the FMV on the date of death. Enter zero for stolen property if you cannot establish basis.
Form 4684 line 5. Fair market value of the property the moment before the casualty or theft. For theft, FMV after equals zero. Independent appraisals or, for vehicles, blue-book values are typical evidence.
Form 4684 line 6. Fair market value after the event. Enter zero for theft or for property fully destroyed. The FMV decline (line 7) is line 5 minus line 6 and is one of the two amounts in the lesser-of test.
Form 4684 line 3. Insurance proceeds, FEMA grants, employer reimbursement, or any other amount received or expected. A timely insurance claim is required by §165(h)(4)(E) for any covered portion of the loss.
Recognized gain (insurance recovery exceeds basis) from any personal casualty during the year. Gains are netted against losses on Form 4684 line 14 and line 15. If gains exceed losses, both are treated as capital gains and losses.
Form 1040 line 11. Used for the 10 percent of AGI floor on line 17. The 10 percent floor does not apply to qualified disaster losses or to the portion of losses offset by personal casualty gains.
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Enter your basis, FMV decline, insurance,
and AGI to see your Form 4684 deduction