TurboTax does not support ponzi-scheme situations.
Under the IRS rules, an investor in a Ponzi scheme is entitled to deduct his or her losses as a theft loss, instead of a capital loss from an investment. This is good for the investors because the deduction for capital losses from investments is normally limited to a maximum of $3,000 per year.
The IRS provides two items of guidance to help taxpayers who are victims of losses from Ponzi-type investment schemes.
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Revenue Ruling 2009-9 provides guidance on determining the amount and timing of losses from these schemes, which is difficult and dependent on the prospect of recovering the lost money (which may not become known for several years).
Revenue Procedure 2009-20 simplifies compliance for taxpayers by providing a safe-harbor means of determining the year in which the loss is deemed to occur and a simplified means of computing the amount of the loss.
To enter casualty losses and again TT does not support the beneficial ponzi scheme rules. so you may want to find another preparer.
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