thief

[grandmabee]

new client lost job and going to jail for thief of money from employer. He made a plea for less time. no trial. plead guilty.

had to make restuition of money taken. I know illeagal activity is taxble but if he repaid all the money and this happend in the same year. should be no income right? (he is a police officer)

[zeke]

He plead guilty to theft. He had the revenue. It is taxable. He MAY be allowed a deduction for restitution, but I woouldn't bet Elrod"s Cookie on it.

z

[Maribeth]

He plead guilty to theft. He had the revenue. It is taxable. He MAY be allowed a deduction for restitution, but I woouldn't bet Elrod"s Cookie on it.

z

No deduction for monies paid back. The restituion was a penalty and not deductible.

Maribeth

[JohnH]

Here was an interesting discussion about the general issue.

Looks like there's no clear guidance, but the issue leans strongly toward no deduction.

http://taxprof.typepad.com/taxprof_blog/20...uctibility.html