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Following a suggestion in an answer to my previous question, I'm considering claiming, on my tax returns, some losses due to theft.

My co-owner hasn't paid me my share of profits on our co-owned rental properties, ever, going back more than 30 years. I've been paying taxes on my share. He always said he would pay me back eventually, but supporting his family was always his #1 objective.

Now he's dead, and the value of his estate is a small fraction of his debt.

My estimate - he hasn't given me any numbers since 2010, so I'm not sure of the profits since then - is that I'm owed around $90K. He also didn't pay $24K in back property taxes, which I'll have to pay by myself.

My understanding is that loss from theft must be claimed in the year the theft happened. Since almost all these occurrences are more than three years ago, does that mean I'll never get a tax refund from these losses?

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    Of course you need a tax accountant? solicitor? But I bet it could be the case that the whole 90,000 is owed to you now, and it's a loss, so it's a loss for this year. However, you surely need a tax accountant? solicitor?
    – Fattie
    Commented Aug 25, 2020 at 16:18

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I am not an accountant, and you need one. But I do know that bad debt is not the same as theft. You need an accountant to look at the details of your situation and figure out how to classify your loss.

Also, and this isn’t directly related to your question, but it seems as though you now are co-owner of property with an estate that owes you money. You need the advice of a lawyer to navigate that mess.

Finally, some advice not for you, but for anyone reading this in the future: It is generally a bad idea to purchase property with someone you aren’t married to.

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