So if I held USDC and got my payout in 2023 for the approx 30% distribution, until the bankruptcy is finalized and the money set aside for lawsuits/tied up in lawsuits, I'm not able to claim any loss? Since my account at Voyager only held USDC, there is no loss for having to convert a different crypto to USDC to cash out.
I had not conversion loss so the IRS site it sounds like until the bankruptcy is 100% completed and closed out, I won't be able to include on my taxes.
From the IRS
"Although some digital assets lost a significant amount of their value during 2022, you cannot claim a loss from this decrease on your tax return until there is a closed and completed transaction, such as a sale or exchange. If your digital asset investment account is frozen or your digital assets are tied up in bankruptcy proceedings, you can’t claim a taxable loss because you don’t have a closed and completed transaction. Once your account has been unfrozen or the bankruptcy proceedings completed, you will have to reassess your situation. If your digital assets and your ownership of them have remained intact, and they have any value, then you don’t have a recognizable loss. If you received a settlement (regardless how small) from the bankruptcy proceedings in exchange for your digital assets, this is considered a sale and you should calculate your capital loss (or gain) on Form 8949 and report it on Schedule D (Form 1040) for the year you received the settlement. If you received nothing from the bankruptcy settlement, neither money nor your digital assets, then your digital asset investment may be considered worthless and different rules apply.
