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I need to know how to determine a theft loss deduction on my…

Customer Question
I need to know...

I need to know how to determine a theft loss deduction on my federal taxes involving a fraudulent contractor who I paid almost $ 53000 to from August through Nov 2017. He started many jobs on my my house but did not complete anything and left my house literally torn apart. I am now having to pay other contractors to finish his partially started jobs and repair damage he had caused. He is now sitting in jail facing many felonies for fraudulent schemes involving other people and businesses as well so there is no question that I am a victim of theft.

Accountant's Assistant: Have theft charges been filed? If so, when is the next court date?

He had a preliminary hearing this Monday which he waived. There were two other cases lumped into this hearing in my county. He has several outstanding warrants out for him in other counties and states even. He will be facing a grand jury in July in my county (hopefully if they can get him on the docket). If not then, it will be pushed back to November.

Accountant's Assistant: In what state did the theft occur?

West Virginia. He also stole materials from my house that I had paid for with my credit card. I had given him money for other materials that he never purchased and none of the jobs that he wanted "half down payments" for were finished or in some cases not even started. It was to be an extensive renovation involving new roof, siding, windows, porch, deck, driveway, tree removal, waterproofing of foundation, rebuilding of interior staircase and repairs to supports in the crawlspace.

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

How do I need to approach this for taxes? As one casualty loss? Or do I need to separate out all of the various "jobs" he was contracted to do and then assign a monetary figure to each separately?

Submitted: 24 days ago.Category: Tax
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3/27/2018
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 24 days ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,006
Experience: 35 years tax experience, including four years at a Big 4 firm.
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I'mCustomer I can assist, but it sounds like you have legal counsel, and that there might be some assets to collect upon. That complicates things.I'll look back in tomorrow. I can tell you an effective legal strategy that you may have overlooked.
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Customer reply replied 24 days ago
The contractor has no assets and no insurance. He had used a large amount of the money to buy a truck for his girlfrind and it's titled in her name. The rest he lost at a local casino. So as the saying goes "you can't get blood from a turnip". My homeowners insurance said they will not cover any of the damages either.
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 24 days ago
This is one casualty loss. Claim it for 2017 if the contractor was jailed in 2017.The legal technique I can suggest is putting the contractor in bankruptcy. Once you petition the court, they will look at his activity, and they have the power to determine fraudulent conveyances ( bought girlfriend a truck, perhaps other transfers) and bring those assets back (they can force the sale of the truck and recovery of the money of the transfers qualify). An attorney in your area can advise if this might have value.Your tax pro will be able to assemble your loss from your records. I suggest that you use a pro, because calculating and reporting the loss is involved.Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer
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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,006
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