Reminders

Qualified wildfire relief payments. Certain relief payments received between 2020 and 2025 following a wildfire disaster are not taxable. For more information on income you may exclude and how to file an amended return for an earlier tax year, see Qualified wildfire relief payments, later.

East Palestine disaster relief payments. Certain relief payments for the train derailment in East Palestine, Ohio, on February 3, 2023, are not taxable. For more information on payments that may be excluded and how to file an amended return for an earlier tax year, see East Palestine disaster relief payments , later.

How to report the loss on Form 1040-X. You should adjust your deductions on Form 1040-X. The Instructions

for Form 1040-X show how to do this. Explain the reasons for your adjustment and attach Form 4684 to show how you figured your loss. See Figuring a Loss in Pub. 547.

If the damaged or destroyed property was nonbusiness property and you didn’t itemize your deductions on your original return, you must first determine whether the casualty loss deduction now makes it advantageous for you to itemize. It is advantageous to itemize if the total of the casualty loss deduction and any other itemized deductions is more than your standard deduction (and increased standard deduction amount, if applicable). If you itemize, attach Schedule A (Form 1040) or Schedule A (Form 1040-NR), and Form 4684 to your amended return. Fill out Form 1040-X to refigure your tax to find your refund.

Special rules and return procedures expanded for claiming qualified disaster-related personal casualty losses. The Taxpayer Certainty and Disaster Tax Relief Act of 2019, the Taxpayer Certainty and Disaster Tax Relief Act of 2020, and the Federal Disaster Tax Relief Act of 2023 expanded the special rules and return procedures for personal casualty losses attributable to certain major federal disasters that were declared between 2018 and February 10, 2025.

Qualified disaster losses in those tax years may be claimed on Form 4684. See Qualified disaster loss, later, for more information.

Tip: If applicable, you may have to file an amended return on Form 1040-X to claim these benefits for a prior-year return. Form 1040-X is available at IRS.gov/Form1040X . Prior revisions of Form 4684 are available at IRS.gov/ Form4684 .

Limitation on personal casualty and theft losses. For tax years beginning after 2017, if you are an individual, casualty or theft losses of personal-use property not connected with a trade or business or a transaction entered into for profit are deductible only if the loss is attributable to a federally declared disaster. Theft losses incurred in a transaction entered into for profit may be deductible.

Personal casualty and theft losses attributable to a federally declared disaster are subject to the $100 per casualty and 10% of your adjusted gross income (AGI) reductions unless they are attributable to a qualified disaster loss.

Personal casualty and theft losses attributable to a qualified disaster loss are not subject to the 10% of the AGI reduction and the $100 reduction is increased to $500.

An exception to the rule above limiting the personal casualty and theft loss deduction to losses attributable to a federally declared disaster applies if you have personal

Instructions for Form 4684 (2025) Catalog Number 12998Z Dec 19, 2025 Department of the Treasury Internal Revenue Service www.irs.gov

casualty gains for the tax year. In this case, you will reduce your personal casualty gains by any casualty losses not attributable to a federally declared disaster. Any excess gain is used to reduce losses from a federally declared disaster.

For more information, see Disaster Losses , later, the instructions for line 14, and Pub. 547.

Federal Emergency Management Agency (FEMA) disaster declaration numbers. If you are reporting a casualty or theft loss attributable to a federally declared disaster, check the box and enter the DR or EM declaration number assigned by FEMA in the space provided above line 1 on your 2025 Form 4684. For additional information, see FEMA disaster declaration numbers, later.

AMT adjustment for standard deduction made retro- actively inapplicable to net qualified disaster losses. The AMT adjustment for the standard deduction doesn’t apply to the increase in the standard deduction that is attributable to a net disaster loss. See Taxpayers who also file the 2025 Form 6251, Alternative Minimum Tax for Individuals , later, for more information.

Special rules for capital gains invested in qualified opportunity funds (QOFs). If you have a capital gain for 2025, you can invest that gain into a QOF and elect to defer part or all of the gain that you would otherwise include in income until December 31, 2026. You may also be able to permanently exclude gain from the sale or exchange of an investment in a QOF if the investment is held for at least 10 years. For information about how to elect to use these special rules, see the Instructions for Form 8949, Sales and Other Dispositions of Capital Assets. For additional information, go to Opportunity Zones Frequently Asked Questions on IRS.gov.

Deferral of gain invested in a QOF. If you realize a gain from an actual, or deemed, sale or exchange with an unrelated person and, during the 180-day period beginning on the date realizing the gain, invested an amount of the gain in a QOF, you may be able to elect to temporarily defer part or all of the gain that would otherwise be included in income. If you make the election, the gain is included in taxable income only to the extent, if any, that the amount of realized gain exceeds the aggregate amount invested in a QOF during the 180-day period beginning on the date the gain was realized.

How to report. Report the gain as it would otherwise be reported if you were not making the election. Report the election for the amount invested in a QOF on Form 8949. See Form 8949 for how to make the election. You will need to attach Form 8997 annually until you dispose of the QOF investment. See the Form 8997 instructions for more information.