Jenner & Block

"Can I Take a Theft Loss? The Unwitting Individual Taxpayer’s Dilemma,” ABA Tax Times

In this article, Jenner & Block Associate Rafi W. Mottahedeh examines difficulties taxpayers face when they fall victim to con artists, internet fraud or other schemes.  “The Madoff scandal, the Bayou scandal, and many other investment scandals caused profound financial damage to taxpayers one would normally view as sophisticated.  What links all of these together is the fact that the taxpayer suffered a real economic loss and is left feeling that they have been robbed,” he writes.

Mr. Mottahedeh explains that in most cases individuals, unlike a business, face significant difficulties in deducting losses for such unfortunate incidents.  He then discusses what constitutes a theft and when an individual can take a theft loss.