Investment loss due to fraud by individual who never reported investment to security company

msheridan1 — Thu, 06 Jun 2019 10:28:44 GMT

Invested $100,000 with individual who was employed by brokerage house but he used the $100,000 in a pyramid scheme that he was running not known to brokerage house. How should the $100,000 loss with a $45,000 recovery be reported to IRS

If it is a Ponzi type scheme, it is reported as a Casualt...

Coleen3 — Thu, 06 Jun 2019 10:28:45 GMT

If it is a Ponzi type scheme, it is reported as a Casualty and Theft. Please see the links below.

https://www.irs.gov/pub/irs-drop/rp-09-20.pdf

https://www.irs.gov/pub/irs-drop/rr-09-09.pd

Mark "Revenue Procedure 2009-20" at the top of the Form 4684, Casualties and Thefts, for the federal income tax return for the discovery year. The taxpayer must enter the “deductible theft loss” amount from line 10 in Part II of Appendix A of this revenue procedure on line 34, section B, Part I, of the Form 4684 and should not complete the remainder of section B, Part I, of the Form 4684.

topic Investment loss due to fraud by individual who never reported investment to security company in Investors & landlords

Investment loss due to fraud by individual who never reported investment to security company

If it is a Ponzi type scheme, it is reported as a Casualt...