Is Stolen Property taxable income? It is in the US! Amazing US tax law "Fail"/"Win"
There's actually a rule on how to treat "stolen property" on your US tax return:
If you steal property, you must report its fair market value in your
income in the year you steal it unless in the same year, you return it
to its rightful owner."
Someone reported a robbery?
As usual, I remind you that I'm not offering you any tax advice here - hire a professional if you need any of that. Of course, I don't think the target audience for this bit of tax law would even care about my disclaimer - they probably have other issues they should instead be dealing with.
What makes this funnier is seeing this featured on Failblog, although I stumbled upon it courtesy CPASuccess - thank guys, that's just epic. Possibly be an epic win rather than a fail depending on how you look at it, though.
I was going to say "I don't have the US tax code on hand to verify if this is in fact real," when I first saw it on their blog, but then I skipped back to the start of their post and then I realized CPASuccess actually linked to it, it's right there in Publication 17 - here's the hotlink. Yes, the Americans did decide to publish their tax code online.
The legends were true. I love how the US Government cleverly includes this "Other Income" line, which allows them to nail people for tax evasion if they somehow can't arrest them for the theft itself. How they would prove this is another matter altogether, but it makes you smile knowing that this is actually on the books.
Wouldn't it just be fitting to see a grassroots movement to declare certain US government 'subsidies' to be considered "theft" for this purpose to round out the tragic comedy here?