Submitted By: someone
Answered: February 6, 2018 8:58 pm

We were embezzled to the tune of $167,000. The embezzler is now in prison. Can we deduct this loss?

If the loss occurred in 2017 and it’s a personal loss, it may be deductible as a theft loss. The loss is treated as an itemized deduction allowable only to the extent it exceeds 10% of adjusted gross income. Starting in 2018, there is no deduction allowed for personal theft losses. Of course, business losses continue to be deductible.

Tax Glossary

Tax attributes

When debts are cancelled in bankruptcy cases, the cancelled amount is excluded from gross income. Tax attributes are certain losses, credits, and property basis that must be reduced to the extent of the exclusion.

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