How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Stephen G. Your Own Question
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7009
Experience:  Extensive Experience with Tax, Financial & Estate Issues
30050794
Type Your Tax Question Here...
Stephen G. is online now
A new question is answered every 9 seconds

I bought and paid PCs that were supposed to be

Customer Question

I bought and paid for 4 PCs that were supposed to be for a company I was working for that turned out to be a fraud. I gave the PCs to the company, but never got reimbursed. How can I best claim that loss?
As a follow up - can I claim all the hours that I spent "working" for this company that I never got paid for?
Submitted: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year ago.
Tell me more about what went on here.You can't get any credit for work you never got paid for.What happened to the computers?What happened to the Company & the owners? Are they around.What efforts did you make to obtain either the reimbursement or the computers in an attempt to mitigate your loss?
Customer: replied 1 year ago.
I shipped the computers to the address that was provided. They provided me a bank account to withdraw the funds, but a few weeks later that reimbursement amount was pulled back from my bank account. It turned out that I was working for a fraudulent company that "employed" me as a scam. I filed a police report and contact a federal bureau to investigate, but will likely never recover the PCs or the money I spent on them.
Customer: replied 1 year ago.
In addition, under the terms of the employee agreement which I signed, I was supposed to be receiving an hourly wage for the other tasks they had me work on. However, they never paid me for my work.
Expert:  Stephen G. replied 1 year ago.
Well, if you itemize deductions, based upon the facts and circumstances as you describe them, you can definitely claim the cost of the computers as a "Casualty or Theft Loss" on Form 1040, Schedule A for the year that you discovered the loss.Unfortunately, there is no tax deduction for the time you worked for the company and didn't get paid.
Customer: replied 1 year ago.
Can I claim the purchase of the PCs as a job related expense?
Expert:  Stephen G. replied 1 year ago.
No, I don't believe so as you didn't really have a job that generated any earnings. Even if you did it would still be an itemized deduction but it wouldn't be subject to the 10% AGI floor.If you were to take the position that you were an Independent Contractor, and claim the purchase of the computers as a business expense, you wouldn't be able to write the costs off under IRC 179 unless you have other income as IRC 179 deductions can't move a business into a loss position.Do you have a business that generates revenue where you act as a Independent Contractor?
Expert:  Stephen G. replied 1 year ago.
Just checking in..................I see that you've had a chance to read my response, do you have any follow-up questions?If not, please remember to rate my response as that is the only way we receive credit for our share of any payment that you have already made.Thanks very much,Steve G.
Expert:  Stephen G. replied 11 months ago.
Just checking in..................I see that you've had a chance to read my response, do you have any follow-up questions?If not, please remember to rate my response as that is the only way we receive credit for our share of any payment that you have already made.Thanks very much,Steve G.

Related Tax Questions