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

Involuntary conversion

Forced disposition of property due to condemnation, theft, or casualty. Tax on gain from involuntary conversions may be deferred if replacement property is purchased.

More terms