Appeals Court Denies Entrepreneur’s Theft Loss Tax Deductions

An attorney and entrepreneur failed to convince a federal appeals court that he’s entitled to tax deductions for legal fees, theft loss on investments in a medical software partnership, and net operating loss carryovers for previously unused losses.

The US Court of Appeals for the Sixth Circuit on Thursday upheld the Tax Court’s decision to deny Michael Shaut’s claimed tax deductions. These deductions were for business expenses related to 17 lawsuits filed against Shaut after fraud was discovered at his medical software partnership, Downing Investment Partners LLP, where he had been involved.

Shaut, who joined Downing in 2014, isn’t entitled ...