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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Burglary Restitution as deductable charitable donation
Expert: Glenn D Schnabel
Date: 9/6/2008
Subject: Burglary Restitution as deductable charitable donation
Question
Over 10 years ago my car got vandalized and had substantial damage. The persons (17 and 16 years) who did this got caught and were ordered pay restitution to me (total $1206,-) Problem the perpetrators do not want to pay and the Victim Assistance Organization (VAO) does not have to guts to close the case after the 10 years.
I would like to close these cases and my plan is to instruct the VAO to consider the remaining restitution amount as a donation and when the perpetrators pay in the next years should be donated to the red cross.
At the same time I would claim the total remaining restitution as a deductible charitable donation on my current tax form. Is this allowed or from a tax perspective should I consider this as an non-collectible loan?
Answer
Eghert,
Thank you for your question.
1)Is this allowed or from a tax perspective should I consider this as an non-collectible loan?
Since you are a cash basis taxpayer, you can take the deduction when the
restitution is made.
So, in effect you will be able to take a casualty loss on IRS form 4684, which is subject to a 10 income adjustment.This then flow through itemized deductions.
If you receive this award, it may be income to you when received and if you donate that money to a recognized 501(c)(3)charitable organization, then you can take a deduction for that when paid.
I;m sorry for you about your car damage, As they say "as long as you have your health, you're better off. Car damages can be fixed.
Hope this is helpful
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