Legal Question in Tax Law in California

Hello

i sued the movers and won the small claims case of $ 5000 plus fees

the owner of the moving company of course showed up in court for the first hearing. i was granted a victory.i tried to have him served twice to pay up. he and his moving company vanished . my question is, may i take my loss and use it as a tax decuction . we have the paper trail of course

thank you

gary


Asked on 9/10/10, 9:41 am

1 Answer from Attorneys
George Shers Law Offices of Georges H. Shers

Unfortunately, the IRS only allows you to take money you had to spend or physical damages you suffered [the latter being under the itemized deduction category of Thief, losses] to reduce your taxes. It does not matter to the IRS as to who was responsible for the loss. So the judgment itself is not deductible, only the value of the money or physical items that represent the basis of the suit.

See if the owner has incorporated or runs another moving business, when you see an ad for a new moving business call and try to speak to the boss of the company [not using your real voice], see if he had to put up a bond for the business. If none of that works, give it to a collections company; getting half of something is better than 0% of $5,000.

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Answered on 9/15/10, 2:03 pm


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