Question

Which of the incidmight be considered a theft loss for yax purposes?

A. The disappearance of a diamond necklace, discovered on July 1. The lady Timothy taxpayer remembers seeing the necklace was in February

B. The accidental destruction of the taxpayers car while his dependent daughter was driving it

C. The losd of the taxpayers wallet containing $1,000 cash ad a result of a mugging

D. The thef of a cash-basis taxpayers services. The taxpayer a tutor was nothing paid for $50og turning classes

Answer 1

The Answer for this particular question is Option C that is the loss of the taxpayer's wallet containing $1000 cash as a result of a mugging.

Theft is taking of money or property with criminal intention.It must be illegal in the eyes of law of the state where it occured.

If there is any losses of taxpayer's personal money or property, such type of losses are deductible. Theft Losses generally requires proof that the money or property are actually stolen and not just lost pr missed.

In first option, there is just loss of necklace.The necklace is not stolen.

In second option, this comes under Casualty.

Hence the answer for this particular question is option C.