Victims of fraudulent investment schemes can claim a theft loss deduction if certain conditions apply - Losses From Ponzi-Type Investment Schemes
The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes. (note that not all losses may be from a Ponzi-type Scheme - consult a tax pro who can evaluate your situation)
• Revenue Ruling 2009-9, 2009-14 I.R.B. 735 (available at IRS.gov/IRB/2009-14_IRB#RR-2009-9).
• Revenue Procedure 2009-20, 2009-14 I.R.B. 749 (available at IRS.gov/IRB/2009-14_IRB#RP-2009-20).
• Revenue Procedure 2011-58, 2011-50 I.R.B. 849 (available at IRS.gov/IRB/2011-50_IRB#RP-2011-58).
If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and choose to follow the procedures in the guidance, first fill out Section C to determine the amount to enter on Section B, line 28. Skip lines 19 through 27. Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. You don't need to complete Appendix A.
For more information, see the instructions for Section C, later, and the above revenue ruling and revenue procedures.
If you choose not to use the procedures in Revenue Procedure 2009-20, you may claim your theft loss by filling out Section B, lines 19 through 39, as appropriate
https://www.irs.gov/pub/irs-pdf/i4684.pdf
