Use Form 4684 to report a gain or a deductible loss from a casualty or theft. If you have more than one casualty or theft, use a separate Form 4684
to determine your gain or loss for each event. Combine the gains and losses on one Form 4684. Follow the form instructions as to which lines to fill
out.
| If you have a: |
Report it on: |
| Gain |
Schedule D (Form 1040) |
| Loss |
Schedule A (Form 1040) |
Adjustments to basis.
If you have a casualty or theft loss, you must decrease your basis in the property by any deductible loss and any insurance or other reimbursement.
Amounts you spend to restore your property after a casualty increase your adjusted basis. See Adjusted Basis in chapter 14 for more
information.
Net operating loss (NOL).
If your casualty or theft loss deduction is more than your income, you may have an NOL. You can use an NOL to lower your tax in an earlier year,
allowing you to get a refund for tax you have already paid. Or, you can use it to lower your tax in a later year. You do not have to be in business to
have an NOL from a casualty or theft loss. For more information, see Publication 536,
Net Operating Losses (NOLs) for Individuals, Estates, and
Trusts.
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