identifying a story as being an urban legend and then
determining if there is any truth to it (nearly always it is fiction)
On point 1, typically urban legends
occur with no known author beyond "I swear it happened to someone I know" or something similar
appears mysteriously and spreads spontaneously in varying forms
contains elements of humor or Horror (the horror often "punishes" someone who flouts society's conventions).
makes good storytelling (interesting and easy to retell)
On point 2, some suggestions are:
Personally trace it back to the origin and confirm the facts; not just an original source of reporting but the actual source the report came from - an eye witness, a video tape of the incident, the actual crime report from the responding office (not just a report of what was supposed to be in the report). If you can't do that, it's probably fake
Often the source of the story will tip you off; if it comes from The Onion or another satirical source, it's going to be false; the story is intended to entertain, not inform
Check out Snopes.com or a similar website to see if it's a known UL. They are usually pretty good about documenting the authenticity of the stories - although they sometimes get duped.
Like any scam - if it sounds too good to be true, it probably is
If you've heard the same story with altered details, it's probably false (urban legends tend to be modified in their details to fit the teller and audience)