yigster

How does this work assuming you didn't know it was stolen? The mom some how finds out her son stole it and pawned it at your shop. The police comes and recovers it and does some paper work. You're out of pocket $50. - but no other trouble due to pawnshop "loophole" The mom gets her silverware back. Son gets charged.

Does it happen like that?

Never mind, it's answered below in a different question. Mom has to pay the $50

Would this profit be classified as interest income or just regular operating income on the tax forms, or would it make any difference? Do you consider each loan an investment?