can you claim any tax deductions for losses incurred due to being victim of a crime?
April 26th, 2010i had two vehicles stolen since January 2007(i know, right?!) one was even a carjacking robbery (cash jewelry medical bills). Both auto were fairly new and paid off..
Of course i was hosed by the impound and Farmers. OUT THOUSANDS!!! my insurance has even tripled
anyway to get any of this not to be a total loss? maybe the taxes i paid on vehicles or etc.??? thanks n God Bless
Replys
Casualty losses are deductible but there are harsh limits on the deductions. Assuming the thefts were separate incidents, you make the following calculations on each car and lost contents:
Take fair market value of car (not replacement cost for a new car) at time of theft.
Add fair market value of stolen contents (not medical bills)
Subtract insurance reimbursement.
Subtract $100
Add the sums for both cars, then subtract 10% of adjusted gross income for 2007. If that number is greater than 0, then you can take an itemized deduction for that amount. For that to do you any good, all your itemized deductions have to add up to more than the standard deduction.
Your medical bills are treated separately. You add up all medical bills not covered by insurance, including prescriptions, for 2007, then subtract 7.5% of adjusted gross income. If that number is greater than 0, then you can use it as an itemized deduction (ignoring health savings accounts and other complications). The reason for the medical expense doesn’t matter, unless it’s something elective like cosmetic surgery.
There’s no relief for higher insurance premiums–Congress considers that a personal expense that you chose to take on, just like buying a car and gas.
Taxes paid on vehicles are treated as a separate issue for federal income tax, regardless of whether they were stolen or not. Contrary to popular opinion, registration fees on cars are not deductible in most states (it depends on how the state figures the taxes).
The harsh treatment of medical and casualty losses is a typically unfair income tax provision because there’s no lobby for sick people or casualty victims. Congress grants tax relief only to people suffering catastrophic illness or loss, even though these expenses are involuntary. Mortgage interest on a home and a vacation home are totally voluntary expenditures, but every dime of mortgage interest is deductible because the real-estate lobby owns Congress.
Possibly the carjacking robbery with the cash & jewelry. I have attached information regarding casualty losses, which this might qualify for. I can’t tell you for certain though, without knowing your income, car value, cash value, jewelry value, medical bills, etc. Medical bills can be included on Schedule A – Itemized Deductions under medical, and taxes paid on the vehicles can deducted on Schedule A – Itemized Deductions under taxes.
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