Can we deduct $20,000 we were scammed out of?

[rjwadejr]

The response as helpful. I'd like ti o print the response

[rwbjr]

IRS Form 4684 is available in HRB Premium and Business for tax year 2020.  Part II states " I am claiming a theft loss deduction pursuant to Revenue Procedure 2009-2020 from a specified fraudulent arrangement conducted by the following individual or entity".  I anticipate completing this form for the loss I incurred due to an online scam and see if I get called in.  I have documentation from my bank as well as local police.

[Anonymous]

@rwbjr It's available on TurboTax too but as you've been told already it will not help you.  You can no longer deduct these types of losses except in very limited circumstances, and you do not appear to have one of those circumstances (for example you can deduct the loss against a very rare thing called a casualty gain but you don't have one of those.)

The loss isn't deductible.  It's tragic, but your personal loss is not tax-deductible. You cannot deduct this, using any software or even if you go in-person to HRB.

Revenue procedure 2009-20  (it's -20 not -2020) was issued and valid in 2009 and through 2017 but the tax law changes in 2017 make it useless to you now. 

[DJCantello2]

Were you able to get anything back on your scam situation?  We had $80,000 loss last year.  Trying to figure things out.  

[AmyC]

Theft losses may be deductible. See the updated Jan 2022 version Topic No. 515 Casualty, Disaster, and Theft Losses - Internal Revenue Service for full details. Which includes:

Theft Losses

A theft is the taking and removal of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and must have been done with criminal intent. The amount of your theft loss is generally the adjusted basis of your property because the fair market value of your property immediately after the theft is considered to be zero.

@DJCantello2

[xiaoliling2]

What does it means? I had the similar simulation for wire scam when I purchase investment property

[JamesG1]

Perhaps.  Review your situation in this IRS publication 2021 Instructions for Form 4684 Casualties and Thefts

Limitation on personal casualty and theft losses page 1 states:

For tax years 2018 through 2025, if you are an individual, casualty or theft losses of personal-use property are deductible only if the loss is attributable to a federally declared disaster. Personal casualty and theft losses attributable to a federally declared disaster are subject to the $500 per casualty limitation.

Losses From Ponzi-Type Investment Schemes on page 7 states:

The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes.......

[Edited 3/24/2022 5:29 PM PST]

@xiaoliling2 

[xiaoliling2]

Can anyone help to identify whether I am able to deductible the money, when I purchase my rental property, I received the wire instruction from fake title company and I lost the money $X. Of course, I do not know who is the thief. Later I paid the money to the right account again. Qustions: (1)  $X is Ponzi scheme? (2) $X loss is part of the business property loss. (rental is part of the business property). (3) Does this X belong to cost of the purchased rental property?

Thanks,

[PatriciaV]

After the Tax Cuts and Jobs Act was passed into law (2017), many forms of casualty losses that were previously deductible on Form 4684 (like Ponzi schemes and scams) no longer qualify as tax deductions. Per IRS Tax Topic 515, the only deductible casualty losses must be from a federally declared disaster.

Although this loss was associated with the purchase of business property, the amount would not be included in the basis of the property. It is a non-deductible personal loss.

[Lgdavis1234]

I was scammed 16900.00 from a fake broker can I deduct that somewhere on my taxes

[PattiF]

After the Tax Cuts and Jobs Act was passed into law (2017), many forms of casualty losses that were previously deductible on Form 4684 (like Ponzi schemes and scams) no longer qualify as tax deductions. Per IRS Tax Topic 515, the only deductible casualty losses must be from a federally declared disaster.

Unfortunately, you are not able to deduct anything on your tax return.

@Lgdavis1234

[jeff1230]

It was a big loss for me but i got help through [link removed] to get back my money

[jeff1230]

Yes i got assisted by [link removed] to get back every dime that was taken from me, though i paid the firm service fees before they handled my request.

[xmasbaby0]

@jeff1230 Do you have an income tax question?

[jeff1230]

Can taxes be done using turbotax?