TAX TIPS (and other stuff)
By Kelly J. Bullis, CPA
2026-January 3rd

The current tax law makes it difficult to take just any type of casualty loss as a tax deduction. Only certain types of losses are still deductible.

If your property sustains natural cause related damage and is located in a Federally Declared Disaster Zone, you can deduct your net loss after all reimbursements. You can even file an amended return for the prior tax year and get the deduction immediately, rather than waiting to file the current year tax return.

If you have been a victim of a personal theft, a loss can be deducted if the loss results from criminal conduct classified as theft under applicable state law, there is no reasonable chance of recovering the stolen funds, AND the loss arises from a transaction entered into for profit. (This last item is the key to deductibility.)

So, if you were contacted by somebody impersonating a fraud specialist at your financial institution and were tricked into giving them access to your financial accounts, then they cleaned out your accounts, moving the funds offshore, and disappeared. You can deduct this unfortunate loss BECAUSE you had a profit motive to invest the now missing funds.

Let’s say you were contacted by email by a scammer claiming that your accounts had been compromised. You are directed to click on a link in the email. That link ends up stealing your real login information. The scammer then cleans out your funds, moves them overseas and disappears. The funds taken were in a condition where you intended to use them to make a profit, so once again, this unfortunate loss is deductible.

What if you entered into an online romantic relationship. (A cute Ukrainian girl?) She tells you that she needs an emergency medical treatment. You send her funds, then she suddenly disappears. Unfortunately, this “loss” is not deductible (the financial part, but also the lost love). There was no “profit” motive. Just love.

Another common scenario, you get a call from your grandson saying he’s in a foreign jail and needs funds wired to get him out. Once again, not deductible since no profit motive, just a desire to help out a family member supposedly in trouble. Next time, call your grandson’s cell phone to see if he’s really in a foreign jail.

Reality is that there are evil people who want to hurt you and take your money. If the scam involves having financial accounts stolen, those are usually deductible. If the scam involves your voluntarily sending funds somewhere, for almost any reason, the loss is not deductible.

Have you heard? Psalm 42:11 says, “Why are you in despair, my soul? Why are you disturbed within me? Hope in God! For I shall still praise Him, the saving help of my countenance, and my God.”

Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com Also on Facebook.