If your investment became worthless in 2024 then you would enter it on your 2024 tax return, not 2023.
You will enter it on schedule D as though it were a sale of an investment and you had received a 1099-B for it. You'll enter the purchase date as the date that you made the investment, the purchase price as the amount that you invested, the sale date as the date that you became certain that the investment was worthless and the sale price as whatever amount you received (which can be zero).
You must be certain that the investment is worthless before you enter the exchange. You should be able to demonstrate it through letters from an attorney or police reports or something - in case you are required to prove it. If there is a chance of partial recovery at a later point then you must wait until that passes before you enter the exchange.
This is a capital loss which can only be deducted against other capital gains or at the rate of $3000 a year against regular income.
@Hanna20
@Octavian052006
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
