@DianeW777 I have seen it argued both way about what to report in 2023. I may be in a similar situation as the OP. I suffered loss due to a ponzi scam in 2022. The discovery year was 2023 and earlier this year I received partial payment and was told more would come in 2024 and possibly 2025 and maybe even beyond.
Here are my follow up questions:
1. I have my cost basis of what I actually invested but the company has its own definition of my “claim value”. They are similar, but my cost basis is greater. What value do I put on line 40 of Section C Part I on 4684?
2. You seem to be saying that I put the amount that was recovered earlier this year, even though it was in 2024, in the Actual Recovery (Line 48). Instructions for Form 4684 says, "Enter the amounts you actually received as a reimbursement or recovery from any source. Don't include amounts that are potential direct recoveries (defined earlier) or potential third-party recoveries (defined earlier)” but it doesn’t say whether one should enter the amount from the same year or not (i.e. entire recovery in the same year as the tax filing year). What’s the justification for entering an amount recovered in 2024? Is it wrong to exclude the amount that was recovered in 2024 and just report as income in 2024? If I received this in, say, July after I filed my tax return for 2023, I wouldn’t have included this so surely it can’t be wrong to not include it?
3. Tax implications for 2024. Say my loss was $200,000. Let’s assume that I claimed $200,000*.75 in Line 47. If I recover $100,000 in 2024 and nothing after that (i.e. forever lost). Then what would be my tax liability? How would this differ, it at all, depending on whether I put something in Line 48 or not for tax year 2023?
THANK YOU!
