Previous Page: Publication 547 - Casualties, Disasters, and Thefts (Business and Nonbusiness) - Casualties, Disasters, and Thefts Next Page: Publication 547 - Casualties, Disasters, and Thefts (Business and Nonbusiness) - Loss on Deposits Use   to find additional instances of index items.

Taxmap/pubs/p547-001.htm#TXMP49e7a057 Theft

Casualty and Theft Loss

A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent.

Theft includes the taking of money or property by the following means.

• Blackmail.
• Burglary.
• Embezzlement.
• Extortion.
• Kidnapping for ransom.
• Larceny.
• Robbery.

The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law.

Taxmap/pubs/p547-001.htm#TXMP3afbf9c8 Decline in market value of stock.

You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. You report a capital loss on Schedule D (Form 1040). For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550.

Taxmap/pubs/p547-001.htm#TXMP524da89f Mislaid or lost property.

The simple disappearance of money or property is not a theft. However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Sudden, unexpected, and unusual events were defined earlier.

Taxmap/pubs/p547-001.htm#TXMP7ffa1eda
Example.

A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. The diamond falls from the ring and is never found. The loss of the diamond is a casualty.

Previous Page:  Publication 547 - Casualties, Disasters, and Thefts (Business and Nonbusiness) - Casualties, Disasters, and Thefts Next Page:  Publication 547 - Casualties, Disasters, and Thefts (Business and Nonbusiness) - Loss on Deposits Use     to find additional instances of index items.