Kris:
Thank you, this was very helpful!
One last question to clarify: I did itemize my deductions in the year I took the loss which amounted to approx $31,000 as Casualty and Theft alone being on Schedule A , which was derived from Form 4684 (Casualties and Theft) where I used the 75% rule ( approx $41,000 was the actual monies lost due to the Ponzi scheme). With my other deductions included, my total itemized deductions that year were well in excess of what my standard deduction amount would have been that year (I file as single). I received a recovery in 2023 of $7006. If I understand your answer correctly, since the $7006 does NOT exceed the 25% of this $41,000, I do NOT need to report this recovery as income?
