@GeorgeM777
Thank you for your input.
However, marking coins as lost / stolen in Cointracker doesn't translate to claiming a loss which would violate IRS laws. In the googling that I've done, I haven't seen anything that requires stolen crypto to be counted as a gain (as if it were a standard sale with a gain) especially on irs.gov. Maybe I missed it. I do understand the logic that if stolen crypto isn't allowed, then it must be treated as a standard sale. This is where I'm struggling. Please read this article by Shehan Chandrasekera, CPA. https://www.cointracker.io/blog/how-to-use-irs-deductions-to-reduce-your-crypto-tax-bill The last sentence in the section titled Casualty & Theft Losses states "If it is past January 1st, 2018, you can mark the sent coins as lost/stolen from the dropdown on the transactions page. This will remove the coins from your portfolio without triggering a capital gain/loss event." Maybe I'm misunderstanding. According to the authors' bio at https://www.forbes.com/sites/shehanchandrasekera/?sh=4ac39cb5465e Shehan is "the Head of Tax Strategy at CoinTracker.io (bitcoin & crypto tax software). He is one of the handful of CPAs in the country who is recognized as a real-world operator and a conceptual subject matter expert on cryptocurrency taxation.
He is a CPE instructor who has been awarded with various awards: 2019 CPA Practice Advisor 40 under 40 accounting professionals, Outstanding Young CPA of the year & Among 21 accountants mentioned on Accounting Today..." I do understand that an article written by a renowned CPA isn't the same thing as getting permission from the IRS to not claim a gain. I appreciate your advice to get legal advice.
