Nicholas Arend wrote:
- quote -

I was thinking of the owner's PERSONAL auto insurance. It
might cover the damage from the accident, although not the
successive damage from stripping the car. Of course, that
might not exist, either.

- quote -

That last seems reasonable. Considering the numbers
involved, perhaps you should consider hiring a tax preparer
to be sure. There are factors I certainly havn't considered.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

The detail shop did not have insurance. (at least we haven't
found it yet) The owner doesn't care about being sued,
otherwise he would have responded to our complaint. The
manager was a perpetual DWI offender (3 in the last 10
years, at least) and is now in jail for a year for the DWI
and is currently being prosecuted for theft of the vehicle.
The business really has no assets to recover, as it is a
detail shop. They have some rags, an old washer and dryer, a
couple of soda machines (which are leased I am sure), and
that is about all. The only option for recovery is from
writing off the judgment (or selling it) and taking the
casualty loss you refer to. The $43k is the amount over and
above what insurance paid us. Aside from a write off, the
only other option is a sheriff levy (wage garnishment) but
that would take forever and I am doubtful it would ever come
to fruition. Is it possible to gain a casualty loss write
off this year, and then pay tax on any money recovered from
a sheriff levy?

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"Nicholas Arend" <narend[at]mn.rr.com> wrote:

- quote -

The only tax benefit is taking a casualty loss for the
unreimbursed portion of the theft loss. If you do get
reimbursed by insurance or other means, the reimbursement is
income. Not collecting on a judgement itself is not a
deduction.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Nicholas Arend wrote:

- quote -

(Apologies to the group. I just don't know what to SNIP.)

Assuming that the judgment is not expected to be paid,
you probably have a casualty loss for the difference of
your basis (approximately cost of the vehicle plus
modifications, disregarding maintenance costs) and your
insurance receipts.

This may or may provide a benefit, as personal casualty
losses are reduced by $100 per occurance and 10% of AGI
(Adjusted Gross Income) before becoming itemized
deductions.

The amount of the judgement you never collect is irrelevant.

Have you considered the possibility that the manager's
automobile insurance might cover part of the loss?

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A friend of mine had a customized sports car stolen from a
detail shop. We have sued the individual (the manager of the
detail shop who took the car out, the owner of the detail
shop) and obtained a judgment for $43,500. I highly doubt
they will ever pay the judgment. What can we do to gain a
taxation benefit for this situation? Will this be considered
a $43,500 write off for my friend for this years taxes? The
car was a total loss as after the manager of the detail shop
crashed, he proceeded to strip the interior until the police
arrived and arrested him for DWI. The vehicle was only
insured for its stock value, as her nor I ever get in
accidents. It happened in April of this year. Any advice on
this situation will be greatly appreciated. Also, would it
be worth spending the money to sit down with a tax
acccountant on this? Or should we just plug the numbers into
a program like turbo tax to account for the loss. Thanks.

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