Freakonomics, Are Pirate Ransoms Tax-Deductible?:
According to the IRS, the answer is yes, since kidnapping ransom qualifies as theft, along with blackmail, embezzlement, and extortion. You must, however, show proof of your loss. So make sure to get a receipt, or file a police report. A recent court order in India also allows for tax deduction on ransom. This has some lawmakers worrying about a potential unintended consequence: a spike in fake kidnappings.
- Forbes, Can You Deduct a Pirate Ransom?
(Hat Tip: Greg McNeal.)
