Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
len28
New Member

Are you allowed to deduct financial loss due to being scammed ?

I used money in my IRA retirement account which ended up being a scam.  Can this be written of as a loss? If so, where?
2 Replies
Critter-3
Level 15

Are you allowed to deduct financial loss due to being scammed ?

Did you have an IRA and use the IRA funds to invest in something that was not legit ?   

 

Or did you take a distribution from the IRA and use that to make the ill fated investment ?

Mike9241
Level 15

Are you allowed to deduct financial loss due to being scammed ?

if the investment was made within the IRA there is no deduction. what you end up with is fewer assets for eventual distribution. if you took the money out and invested it, current tax laws only allow an itemized deduction for losses from Ponzi Type Schemes. form 4684 section C - read the instructions as you may need help in properly preparing the form. there is also the issue of the proper year to deduct such losses.

 

 

Dynamic AdsDynamic Ads
Privacy Settings
v