This is hilarious… who in the hell comes up with this crap? Do they really think some thief is going to report it as “Other Income”? And even if they did (which would be funny), wouldn’t the government sort of be an accomplice since they are benefiting from criminal acts? It almost makes me want to go out and steal a pack of gum just so I can put something in the stolen property section of my tax return. haha
This is clip from page 88 of the IRS handbook for individuals (PDF version here).
So what do you learn from this? If you steal a car, return it before December 31 so you don’t owe taxes on it! haha
Alternately, treat it as “borrowed property without the owner’s permission”, but that’s a little more grey area and might not fall under the IRS’ safe harbor guidelines.