Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!I feel sorry for your situation. Generally you may deduct casualty and theft losses relating to your properties and money on your Federal income tax return. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement, and you must reduce the loss by the amount of any reimbursement. A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and it must have been done with criminal intent. Casualty and theft losses are reported on Form 4684, Casualties and Thefts. Section A is used for personal-use property.Let me know if you need any help with reporting.
As long as your losses may be classified as theft - you may deduct them.The taking must be illegal under the law of the state where it occurred and it must have been done with criminal intent.For a theft loss, in case of audit - you should be able to show all the following. -When you discovered that your property was missing.-That your property was stolen.-That you were the owner of the property.-Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery.
Most likely - you were a subject of scam or fraud - which may be treated as theft. You are not required to file a police report or sue other party in order to claim a theft loss - but in case of audit having a police report or a court judgment might be helpful to proof that the action is illegal under the law of your state.
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