Run a business in NY providing warehouse services. We had a “client” deposit 600 pallets of merchandise with us only to vanish and never make a single payment. We attempted to locate the person and filed a law suite but they were never able to locate him. We have not yet filed for a summary judgement as we do intend to hire a PI in the new year to try and track him down.

My question is about the loss we will see on this. Our accountant files our taxes on a cash basis. When I worked up the numbers I was able to show about a 400,000 loss to date on this. Space that has not been able to be leased to paying accounts. Receiving fees for the unloading of all the trucks and what will be an 80,000 disposal fee to get rid of the merchandise once we pull the trigger (product has no value so we can’t sell it).

Accountant is telling me that we can’t claim anything additional. The loss will be shown based on the fact that we employed people and then no one paid us so that would be a loss, paid for a building but no rent on this space. However is we work hard make more sales and are profitable in other areas and are able to off set this then we could still show a profit. Is it possible that I can’t add any sort of additional loss??? What about the margin we should have made. Certainly a larger company that is not cash based would write off the value of the invoices to the customer. Late fees that are being accrued etc.

Just seems like larger corporations never take a hit they always get to write it off.