Apicella Testa & Company logo

680 Bridgeport Avenue

Shelton, CT 06484

 

Phone: 203-925-9494

 

Website: www.ctcpa.com

July 2024

Data Breach and Identity Theft Losses

Data Breach and Identity Theft Losses

The average cost of data breaches globally in 2023 was $4.5 million, and increasing.* Identity theft generally goes hand in hand with breaches. What should you do if you’re hit by either? Take immediate action to close the breach and protect against future attacks. Then, consider how you might deduct your losses.


Under Sec. 165(a) of the tax code, any taxpayer may deduct losses that (1) are incurred in a trade or business (which would include breach and identity theft losses); (2) are incurred in a transaction entered into for profit, other than through a trade or business; or (3) arise from fire, storm, shipwreck, or other casualty, or from theft. Alternatively, businesses may opt to deduct losses under Sec. 162(a) as "ordinary and necessary" business expense. Individuals may deduct their losses only under Sec. 165(a).


*Cost of Data Breach 2023 Report, IBM


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.