Theft losses under the new Act

Technical topics regarding tax preparation.
#1
Skatter  
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A number of summaries I've read about the new Act--not here though--gave me the impression both personal casualty and theft losses will no longer be deductible except in a federally declared disaster area. But my read of the new paragraph added to sec. 165(h) leads me to believe the changes apply only to casualty losses. Confirmation, anyone? In other words, can Ponzi, Madoff-type, and other fraud losses still be deducted?
 

#2
Skatter  
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Still don't have an answer.

Here's what the revision to the Code says in Sec. 165(h)(5)(A):
"In the case of an individual, except as provided in subparagraph (B), any personal casualty loss which (but for this paragraph) would be deductible in a taxable year beginning after December 31, 2017, and before January 1, 2026, shall be allowed as a deduction under subsection (a) only to the extent it is attributable to a Federally declared disaster (as defined in subsection (i)(5))"

There's no mention of theft loss in that sentence. Can I infer the change relates only to personal casualty losses?
 

#3
CathysTaxes  
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Skatter wrote:Still don't have an answer.

Here's what the revision to the Code says in Sec. 165(h)(5)(A):
"In the case of an individual, except as provided in subparagraph (B), any personal casualty loss which (but for this paragraph) would be deductible in a taxable year beginning after December 31, 2017, and before January 1, 2026, shall be allowed as a deduction under subsection (a) only to the extent it is attributable to a Federally declared disaster (as defined in subsection (i)(5))"

There's no mention of theft loss in that sentence. Can I infer the change relates only to personal casualty losses?

I attended a webinar this week that said theft losses had the same changes.
Cathy
CathysTaxes
 

#4
Skatter  
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CathysTaxes wrote:I attended a webinar this week that said theft losses had the same changes.


The Joint Explanatory Statement had this explanation:

Senate Amendment: The Senate amendment temporarily modifies the deduction for personal casualty and theft losses. Under the provision, a taxpayer may claim a personal casualty loss (subject to the limitations described above) only if such loss was attributable to a disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The above-described limitation does not apply with respect to losses incurred after December 31, 2025. Effective date.−The provision is effective for losses incurred in taxable years beginning after December 31, 2017.

Conference Agreement:The conference agreement follows the Senate amendment.


Note it begins by stating the amendment "...modifies the deduction for personal casualty and theft losses" but then in the next sentence where it elaborates the modifications it fails to mention anything specifically about theft losses. I contend they're still deductible.
 

#5
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Did no one notice the definition of "personal casualty loss"? Here 'tis.

Personal casualty loss
The term “personal casualty loss” means any loss described in subsection (c)(3). For purposes of paragraph (2), the amount of any personal casualty loss shall be determined after the application of paragraph (1).


(3) except as provided in subsection (h), losses of property not connected with a trade or business or a transaction entered into for profit, if such losses arise from fire, storm, shipwreck, or other casualty, or from theft.
 

#6
Nilodop  
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But if we are seeking drafting problems, isn't this one?

(h) Treatment of casualty gains and losses
(1) Dollar limitation per casualty
Any loss of an individual described in subsection (c)(3) shall be allowed only to the extent that the amount of the loss to such individual arising from each casualty, or from each theft, exceeds $500 ($100 for taxable years beginning after December 31, 2009).


Doesn't every year from 2010 onward begin "after December 31, 2009"?
 

#7
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The statutory language "...if such losses arise from fire, storm, shipwreck, or other casualty, or from theft" is a masterful piece of lousy draftspersonship. :x

I'll drink to that one. :D It goes one step beyond the Oxford comma, discussed elsewhere. :shock: 8-) :shock:
 

#8
Skatter  
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Harry Boscoe wrote:The statutory language "...if such losses arise from fire, storm, shipwreck, or other casualty, or from theft" is a masterful piece of lousy draftspersonship. :x

I'll drink to that one. :D It goes one step beyond the Oxford comma, discussed elsewhere. :shock: 8-) :shock:


Indeed and an example of polysyndeton. :geek:

And thank you Len for once again reading parts of the Code that I don't.
 


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