Hello Drazgo, I hope your day is going well.
If your crypto investment still has some value and you sell it at a loss, you can claim the loss on your tax return. First, the losses will reduce any other investment gains for the year.
If you still have losses after offsetting your gains, you can reduce ordinary income up to $3000 for the current year. Any leftovers will be carried over to the next year and used in the same manner each year, until fully used.
However, if your crypto goes totally worthless and cannot be sold. You must deduct on Schedule A as miscellaneous itemized deduction. The issue here is the miscellaneous itemized deduction has be suspended until 2025. Meaning if your crypto became worthless any year before 2025, you would not see any type of deduction on your tax return.
I added a resource to review below
https://www.taxpayeradvocate.irs.gov/news/tas-tax-tip-when-can-you-deduct-digital-asset-investment-l...
