Form 4684 — Casualties and Thefts

This skill produces an audit-grade Form 4684 from a description of damaged or stolen property. It walks the agent through the four sections (A: personal-use property; B: business and income-producing property; C: Ponzi-type investment scheme theft loss under Rev. Proc. 2009-20; D: election to deduct a federally declared disaster loss in the preceding year), applies the §165 limitation rules (especially the disaster restriction in §165(h)(5) for personal-use property and the qualified disaster loss rules in §165(h)(6)), computes the loss, and emits a deliverable the user can transcribe to a paper or e-file form.

Form revision. The line map was verified against the 2025 Form 4684 ("Created 9/26/25") and the 2025 Instructions for Form 4684 (Dec 19, 2025), filed in 2026: Section A lines 1–18, Section B lines 19–39, Section C lines 40–51, Section D lines 52–57. P.L. 119-108 (Sept. 11, 2026) changed the qualified disaster loss definition after those instructions were printed (see Step 2). Re-check the next revision and any post-release changes at https://www.irs.gov/forms-pubs/about-form-4684 before use.

The math is mechanical (smaller of basis or decline-in-FMV, minus reimbursements, minus statutory floors). The judgment is in whether the loss is deductible at all — and that turns on facts the user often hasn't volunteered: was the area declared a federal disaster? was the property personal-use, business, or income-producing? was the taxpayer reimbursed (even partially)?

This skill optimizes for the latter — the agent should ask, not guess.

When to invoke

Engage this skill when any of the following is true: