Good day,
I am sorry you had a loss resulting from the bankruptcy of a crypto exchange.
IRC section 165
https://www.law.cornell.edu/uscode/text/26/165 makes two points that affect the answer to this question:
- Worthless Securities: When the security is worthless, it is treated as capital loss, and up to $3K is deductible. But alas, crypto is not security.
- Personal Loss: Personal loss is a Miscellaneous Deduction that is no longer available. And that's what worthless crypto is considered. (IRS Digital Assets).
In addition, this article provides you with information about the tools and resources TurboTax has available for crypto investors.
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