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IRS asks that criminals provide its cut of stolen property, illegal income

Posted at 3:00 PM, Dec 29, 2021
and last updated 2021-12-29 16:19:32-05

Any owners of stolen property have two options this year, return the property to its rightful owner or document its value in your tax returns.

Stolen property and any income obtained from illegal activities are included under the category of "other income," according to the IRS.

“If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year,” according to the IRS guidelines from 2021.

Likewise, any "found" property falls under similar guidelines; according to the IRS, if you find and keep property that doesn’t belong to you it’s taxable as well at its fair market value, "in the first year it’s your undisputed possession."

"Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity," said the IRS guidelines.