Valuable comics stolen and value uncertain, can the loss be itemized on the tax return?
A taxpayer discovered that his collection of valuable comics was stolen but could not determine the specific loss value, asking whether he could report a theft loss on his 2018 tax return. Based on his description, this article analyzes the possibility of reporting, methods for determining the amount, and key points for responding to IRS review.
As a teenager, I collected comic books and owned over a dozen large boxes of them. I never kept an exact record of the contents, but 20 years ago, I set aside the most valuable comics in a separate box. These comics were stored casually in the basement for a long time. This summer, I decided to organize a catalog to confirm my actual collection, only to find that the box of most valuable comics had gone missing. I confirmed that the box was still there when I moved 10 years ago, and I suspect that contractors working on my house (several of whom had questionable character) stole it. I can't even recall exactly which comics were in the box, but I am certain of two: two near-mint condition first issues, one currently worth $20,000 (if certified), and the other worth $12,000. I believe there were other valuable comics in the box (though I'm not entirely sure of the specific titles), with the total value of the box estimated at $50,000 to $100,000.
I discovered the theft in 2018. Can I claim a theft loss deduction on my 2018 tax return Schedule A? If so, how is the amount determined? What steps are needed to make the claim valid and withstand reasonable IRS scrutiny? Thank you for your answers!