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Volkswagen has been defrauding the world with the emissions

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scandal. My car's value...
Volkswagen has been defrauding the world with the emissions scandal. My car's value is questionable at this moment. No one would be able to put a true value on it. 2015 Passat Diesel TDI SEL. Can I deduct this on 2015 tax return?
Submitted: 1 year ago.Category: Tax
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4/10/2016
Tax Professional: Stephen G., Sr Income Tax Expert replied 1 year ago
Stephen G.
Stephen G., Sr Income Tax Expert
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The problem is that the only area of possible deduction would be a "Casualty or Theft" loss.The "Fraud" itself; in other words the coverup or whatever you want to refer to it as; a fraud if you will that resulted in the auto passing the emissions standards when in fact it doesn't meet them, clearly has affected the value of your vehicle. However, you still have the vehicle so while it's value has diminished, there was no theft (it would be a stretch to call the reduction in value a theft as nothing tangible was actually stolen). Also, I don't see where the loss would fit the definition of a sudden event that resulted in a tangible loss, such as a tree falling on the car, a storm, earthquake, etc. The discovery of the problem may have been "sudden" but that's not what the regulations anticipate.You could certainly attempt to claim a loss of value due to a casualty or theft based upon the fraud that occurred, but I think you would have to plan on winding up in litigation in Tax Court over the deduction and as we all know only the IRS can afford to litigate these issues.Of course since you still have the vehicle you haven't actually realized the loss so in fact I think you would be much better off and have a better chance of recovery (and realize a much bigger recovery) if you were to successfully sue Volkswagen over this issue than you ever would in succeeding against the IRS.
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