Discussion:Private Investigator Fees for casualty/theft loss claim???

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Discussion Forum Index --> Basic Tax Questions --> Private Investigator Fees for casualty/theft loss claim???
Discussion Forum Index --> Tax Questions --> Private Investigator Fees for casualty/theft loss claim???

Illini (talk|edits) said:

16 April 2009
Had lunch today with another financial advisor and one of his clients suffered a theft:

His client had his condo down in Florida cleaned out by a moving van and professional thieves.

He had to hire a private investigator to track down the loot that was discovered stored in a warehouse under lock and key. The police would not or could not go in without any evidence, so the private eye "broke the case" for his client to recover some of his lost possessions.

Many possessions were not recovered, so he has a theft loss to claim -- what about the private investigator fees? Can those be added to basis of those items that were not recovered? Or are they not deductible no matter what?

Great question I thought.

Brock And Associates (talk|edits) said:

16 April 2009
Take a look at publication 547 http://www.irs.gov/publications/p547/ar02.html#en_US_publink100022595 . See section 'Figuring Decrease in FMV — Items Not To Consider'


"Related expenses. The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. However, they may be deductible as business expenses if the damaged or stolen property is business property."


Keeping with the spirit of the ruling, I would have to say no. Additionally in the examples cited, nothing of the kind shows up.


The lost possessions wouldn't be part of the credit nor would any reimbursements from insurance for the unrecovered pieces...but you knew that. I am Captain obvious!


Michael

TheTinCook (talk|edits) said:

16 April 2009
To be deductible as a theft loss, you'd have to be able to include it in the stolen items adj basis. Fees paid to defend title are an adj to basis. Seems like it could be a similar thing.
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