If I had a Ponzi scheme loss - will I not be able to use Turbo Tax? What are the steps then for reporting this?

[maglib]

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.

• 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.

https://ttlc.intuit.com/replies/4874534

[dh2004]

From my CPA: The 2020 trump CARES act will now let you carry the loss from 2018 back 5 years.  We need to see if that is desirable.  To do so we will need copies of your 2013-2017 tax returns.  Carrying the loss back would be very beneficial for a high income person and not so much for a low income person.

Also allows the 2018 loss to show as a carry forward.

[johnlozy]

ttlc link does not work. refers back to turbo tax.

[Critter-3]

That post is more than 3 years old so the link is dead. 

https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/tax-deduction-wisdom-should-you-item...

[johnlozy]

• Ponzi scheme losses. If you lose money or investments in a Ponzi scheme, the loss is deductible as a theft loss of income-producing property.

[dh2004]

Thanks and correct.  I had to hire a CPA for my ponzi exposure.  The CPA was able to go back 5-years and collect all taxes paid using the "Covid National Emergency" Act.  Turbo tax was not helpful in a ponzi situation, but it did force me to get professional help

[awang0759]

Hello,

I have involved in a Ponzi-Scheme and I am looking for a CPA. I lives in California.

Could you share your CPA's information? How does he/she charge?

Thanks,

Allan

[johnlozy]

I could never find anyone to help me with the Ponzi scheme I was sucked into. I found that, after researching on my own, that I knew more than these so called 'professionals". 

Try to read the IRS publications on Ponzi schemes several times. Then try to get an appointment to visit your local IRS office and review it with them. You should be able to deduct this as a theft loss.

Turbo Tax should get itself together and help its customers with Ponzi scheme losses.

[Richd48]

I've  been using TT for years, 7 yrs ago they told me to just put it under Casualty and theft using the safe harbor form, it us very easy been doing it now fir over 7 yrs

[cuario]

Can you share the information for the CPA who helped you with the ponzi exposure?  My wife and I are in a similar situation and are having a difficult time finding professionals familiar with this type of issue.

Thank you in advance!

[cuario]

When you write "been doing it for over sever years", do you mean you are a CPA who can help others with this ponze exposure?  Or you did this for your own taxes seven years ago and it worked out fine for your situation?
Thanks!

[maglib]

In TurboTax, jump to the entry area for casualty loss: Open or continue your return. Search for casualty loss and select the Jump to link in the search results. Select Yes on the Did you have anything damaged or stolen in 2023?

Or enter it as an investment loss.

IRS continually changing laws so be careful posting under old threads.

Always look at IRS rules by doing google search like IRS AND Ponzi 

You could also take a loss on investment sales with no 1099 received..  It all depends on details of your specific loss.