You can enter the cash theft from your business accounts in the Other Miscellaneous Expense section of the Business Expenses for your business.
The Internal Revenue Service defines theft as any crime involving "the taking and removing of money or property with the intent to deprive the owner of it." The definition covers burglary, robbery, embezzlement, extortion and even blackmail. The taking of money through fraud or misrepresentation also counts as theft if the action violates state or local law. Filing a police report helps you document the theft in the event the IRS asks you to substantiate your deduction.
You will need to attach Form 4684.
Claiming the Loss
For losses involving business-use property, refer to Publication 584-B. These workbooks are helpful in claiming the losses on Form 4684; keep them with your tax records.
Thanks much for the tip... however, the 4684 Form doesn't give me a way to describe my cash losses in business. It only talks about federal disaster losses. Is there some other Form I need? Also I haven't at looked at the Pub 584 or something yet. Perhaps that will explain... ?
Best, Nash
Part B is for businesses. The form is a little unwieldy but think of your loss as a physical object. The event was fraud. Your FMV before was the amount that was taken, the FMV after was zero, since $8124-$8124 is zero.
I fell for a Phishing Email. They emptied my personal Coinbase Account of $3,218. Will the same Publication work for me? I'm using Turbotax Premier, there is a loss section. So far I've handle it as selling the 14 crypto coins at the price when they were taken, (overall a loss), but it really all went to 00 for me. Any ideas?
No. Your loss is not a business loss but rather an investment loss. You will handle it as an investment sale loss. However you must enter what you paid for the CoinBase, as the cost basis (not the value on the date it was stolen).
You cannot take a loss on anticipated increase in value when it's money you never paid tax on. Use the instructions below to enter your investment loss and if you entered it any place else you should delete it.
Be sure to select to enter the it yourself and select short or long term depending on how long you held the CoinBase.
I have "Coinbase Pro" under Institution Name along with other Brokerages. I entered all 14 items like I would stocks. Date and purchase price and you are saying Sale Price should be $00 on the date of the theft. That sounds correct to me. The few I was able to buy and sell myself I will do that proper way. I will just have more loss to carry over for the future.
Thank you, confirm please.