A construction contractor defrauded me and embezzled our money from the get-go using a stolen construction license, forged construction permits, collected money without supplying goods such as cabinets, doors, electrical, sewage, paint, pretty much everything and ran away. The California License Board investigated the fraud and as soon as he learned about having been caught defrauding, he disappeared. The Attorney General issued an arrest warrant for not appearing for hearing. I filed a civil lawsuit. I understand the IRS allows deduction for fraud using IRS form 515 but the form does not have any section that allows deduction. Can I and how to deduct this loss?
