Can you deduct losses due to crime?
March 4, 2005 6:09 PM Subscribe
Followup to an earlier question: Can you deduct financial losses incurred due to a car break-in on your taxes?
I spent $700 repairing the car to (almost) the condition it was in before the incident, plus another $150 to get a new stereo. Someone told me there is a category called "personal loss" or something, but I'm turning up nothing in my searches... Any ideas? (USA-specific)
Of course, even if it does turn out to be real, I have to wait until next year since this happened in January.
I spent $700 repairing the car to (almost) the condition it was in before the incident, plus another $150 to get a new stereo. Someone told me there is a category called "personal loss" or something, but I'm turning up nothing in my searches... Any ideas? (USA-specific)
Of course, even if it does turn out to be real, I have to wait until next year since this happened in January.
Oh, of course this is only of any use if your total itemized deductions exceed the standard deduction you would otherwise take.
posted by contessa at 6:31 PM on March 4, 2005
posted by contessa at 6:31 PM on March 4, 2005
Response by poster: Nice, thanks contessa. I'm a loan-owner so I will be itemizing... that's good news, at least.
posted by knave at 6:40 PM on March 4, 2005
posted by knave at 6:40 PM on March 4, 2005
Uh, knave, don't expect too much yet.
I just had my car broken into last week, and lost a couple thousand dollars in camera equipment. I spoke with my accountant yesterday, and he basically said to forget about it.
A person pretty much has to suffer a major loss (I don't know the exact figures) in order to be able to claim a deduction. Unless the $850 you spent represents a significant portion of your income, I think you're out of luck.
(I know basically nothing about taxes. Check on this with somebody who knows for sure. I'm just saying not to get your hopes up. I had hoped for some silver lining after losing all my camera stuff...)
posted by jdroth at 10:43 PM on March 4, 2005
I just had my car broken into last week, and lost a couple thousand dollars in camera equipment. I spoke with my accountant yesterday, and he basically said to forget about it.
A person pretty much has to suffer a major loss (I don't know the exact figures) in order to be able to claim a deduction. Unless the $850 you spent represents a significant portion of your income, I think you're out of luck.
(I know basically nothing about taxes. Check on this with somebody who knows for sure. I'm just saying not to get your hopes up. I had hoped for some silver lining after losing all my camera stuff...)
posted by jdroth at 10:43 PM on March 4, 2005
Best answer: The loss must be major, and you have to have -- you knew this was coming -- paperwork.
> A theft is the taking and removing of property or money ... Lost or mislaid property is not considered a theft; you cannot deduct the loss.
If your property is covered by insurance, you should file a timely insurance claim for reimbursement of the loss. Otherwise you cannot deduct this loss as a casualty or theft....
To determine the amount of a casualty or theft loss of personal–use property, ... you must know the fair market value of your property.... The amount of your loss is the lesser of:
# The decrease in fair market value as a result of the casualty; or
# Your adjusted basis in the property before the casualty or theft.
You must reduce your loss by any reimbursement you receive or expect to receive, such as an insurance recovery.
To determine how much of the loss is deductible, if the property was held by you for personal use, or partly for personal use, you further reduce your loss by $100.... The total of all your casualty and theft losses of personal use property for the year must then be reduced by 10% of your adjusted gross income. The balance that remains after making these reductions is the amount of your deductible casualty or theft loss of personal use property.
So, if you make $30,000 (AGI), the uninsured theft loss must be greater than ~$3333.
posted by dhartung at 2:44 AM on March 5, 2005
> A theft is the taking and removing of property or money ... Lost or mislaid property is not considered a theft; you cannot deduct the loss.
If your property is covered by insurance, you should file a timely insurance claim for reimbursement of the loss. Otherwise you cannot deduct this loss as a casualty or theft....
To determine the amount of a casualty or theft loss of personal–use property, ... you must know the fair market value of your property.... The amount of your loss is the lesser of:
# The decrease in fair market value as a result of the casualty; or
# Your adjusted basis in the property before the casualty or theft.
You must reduce your loss by any reimbursement you receive or expect to receive, such as an insurance recovery.
To determine how much of the loss is deductible, if the property was held by you for personal use, or partly for personal use, you further reduce your loss by $100.... The total of all your casualty and theft losses of personal use property for the year must then be reduced by 10% of your adjusted gross income. The balance that remains after making these reductions is the amount of your deductible casualty or theft loss of personal use property.
So, if you make $30,000 (AGI), the uninsured theft loss must be greater than ~$3333.
posted by dhartung at 2:44 AM on March 5, 2005
This thread is closed to new comments.
posted by contessa at 6:30 PM on March 4, 2005