@klhrabosky
I hear what you're saying-it is confusing. I'm a novice digital asset investor, too.
But, it seems to me that the 2022 value can be disregarded unless there was a payout of any kind in 2022. It is an unrealized value and does not appear to be applicable to 2023.
For the portion that was received, my personal opinion is to treat it the same as a sale. The IRS information states they view digital assets as property. For my entry level purposes, no mining, no income received--strictly investment...I think of bankruptcy/liquidation as thr same as selling an investment.
For the portion of my holdings that were not reflected in Voyager's download to Coin Ledger, it appears that portion should be reported as a short term capital transaction.
Here is a hypothetical example:
*The person bought $1,000 of various digital assets through Voyager in 2021. (Any income received was reported in 2021 and 2022 as needed so that the person has basis.)
*Voyager went into Chapter 11 and sent checks to the investor in 2023 for $50 considering the investor paid out in full.
*Let's say Coin Ledger reflects that the cost basis for the $50 was $560, which will generate a hypothetical $510 long term capital loss (since it was held longer than 1 year) reported on Schedule D/Form 8949.
This leaves $440 deemed worthless. (It is not technically lost/stolen in the sense someone broke in and took it or it was otherwise lost.)(a different category to the IRS than capital gains/losses)
*The IRS guidance appears to me to direct the investor to claim the remaining hypothetical $440 originally spent by reporting $0 sales with $440 cost as a short term loss on Schedule D/Form 8949.
