OWC Pharmaceutical Research Corp (OWCP)

[swamp boy]

I. Claiming an Ordinary Theft Loss Deduction
A. General Rule Under Section 165
Deductions for theft losses are governed by section 165(a), which provides that there shall be allowed as a deduction any loss
sustained during the tax year that is not compensated by insurance or otherwise.
Section 165(e) specifies that any loss arising from "theft" shall be treated as sustained during the tax year in which the taxpayer
discovers the loss (that is, a disposition is not required).8 In general, the taxpayer does not have to prove when the loss actually occured.