J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

18.13 Figuring Your Loss on Form 4684

Form 4684 is used to report casualties or thefts of personal-use property, business property, or income-producing property. The deductible loss is usually the difference between the fair market value of the property before the casualty or theft and the fair market value after the casualty or theft but this loss in value must be reduced by (1) reimbursements received for the loss and (2) if the property was used for personal purposes, by the $100 floor (18.12). However, the loss may not exceed your adjusted basis (5.20) for the property, which for many items will be your cost. If your adjusted basis is less than the loss in value, your deduction is limited to basis, less reimbursements and the $100 floor for personal-use assets. After figuring all allowable casualty and theft losses and gains for personal-use property, the net loss (losses in excess of gains if any) is deductible only to the extent it exceeds the 10% adjusted gross income (AGI) floor (18.12).

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Filing Instruction

Reporting Losses From Personal-Use Property on Form 4684

If you are claiming a loss for personal-use property, use Section A on page 1 of Form 4684. If you suffered more than one casualty or theft of personal-use property during the year, use a separate Form 4684 for each one and make the calculations through Line 12. The amounts from the separate ...