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Form 4684 is used to report gains and losses from casualties and thefts. Casualty losses are losses from fire, theft, storm, hurricane, flood, sonic boom, earthslide, earthquake or other sudden, unexpected, and unusual causes. Damage to your automobile resulting from a collision is also a casualty loss. Termite damage is not considered a casualty loss because it fails the "suddenness" test. If the casualty loss relates to your business, you can deduct the full amount on Schedule C. If the casualty loss is to nonbusiness property, a loss can be taken on Schedule A if the loss exceeds $100 plus 10% of your adjusted gross income. The amount of the casualty loss is the lesser of (1) the fair market value of the property before the casualty less the fair market value of the property after the casualty or (2) the adjusted basis of the property before the casualty happens. Any money you receive from insurance, government, or other parties to compensate for the damage reduces the amount of loss you can claim on your tax return. EXAMPLE: A hurricane completely destroys your home. You purchased your home five years ago for $100,000, but the fair market value of the home before it was destroyed was $130,000. You receive an insurance reimbursement of $50,000. The amount of your loss is $50,000 ($100,000 basis less $50,000 reimbursement). Assuming your adjusted gross income for the year is $60,000, you can take a $43,900 casualty loss on Schedule A ($50,000 - $6,000 - $100).