TurboTax does not support theft losses from Ponzi schemes. The Unsupported Calculations document says "The program does not support tax losses from investment fraud." That includes Ponzi schemes. The program help for theft losses says the following.
"Ponzi schemes and other fraudulent investment arrangements
"We're sorry to hear about this loss. Unfortunately, this type of loss can be particularly complicated for tax purposes, and in many situations the tax treatment depends on factual determinations best handled by an attorney. TurboTax does not support tax losses from investment fraud. We recommend consulting a tax professional if you've experienced this situation."
Form 4684 Section C actually is included in TurboTax. It can be accessed in forms mode in the CD/Download software if the box on line 5c of the Casualty and Theft Worksheet is checked. However, trying to fill out the form yourself is not recommended. There is absolutely no guidance. The help just refers you to various Revenue Rulings and Revenue Procedures, which are written for tax professionals and lawyers. And of course, since Section C is not supported, it's not covered by the TurboTax Accurate Calculation Guarantee.
The best thing for you to do would be to go to a tax professional or tax lawyer who has experience reporting losses from Ponzi schemes.
