S.Amdt. 2528

This amendment, submitted by Mr. Grassley, aims to add a casualty loss deduction for certain losses related to retirement account theft. Specifically, it changes the law to include theft in connection with a qualified theft-related retirement distribution as an eligible casualty loss.

To qualify for this addition, the text outlines several requirements that must be met. The distribution from an eligible retirement plan must be induced by fraud or deceit, and the amounts distributed must be lost due to theft.

• The taxpayer must report the theft to a law enforcement agency within 60 days of discovering the theft.
• The taxpayer must provide substantiation of the theft and proof that it was properly reported to a law enforcement agency, which includes a police report and a statement from the plan, or other documentation determined by the Secretary.
• The loss is allowed only to the extent of income inclusion resulting from the distribution.
• A 10-percent rule does not apply to loss or gain related to this specific theft-related retirement distribution.
• The loss or gain can be taken into account either in the year of the income inclusion or in the year the theft or fraud is discovered.
• The 10-percent additional tax on early distributions is waived for these qualified theft-related retirement distributions.