Has anyone filled out Form 4684 to report losses crypto from the Celsius bankruptcy?

[alejandrocastro8]

recovered some assets from celsius but lost over half of the coins I had in the account

[RobertB4444]

You should not use form 4684 for an investment loss.  You should place it on schedule D and form 8949.

You will enter this as a sale of an investment.  Enter 'Various' as the date of purchase (or an actual date if you bought all your cryptocurrency on the same day).  Enter the full amount that you had invested in Celsius as the purchase price.  Enter the date that you received partial payment as the sale date.  Enter the value of the cryptocurrency that you received on that date as the sale price.

If the assets that you recovered were your actual assets then you need to adjust the cost basis to exclude those amounts.  If they were replacement assets then they should be included as part of the payment that you received and have a basis going forward of their value on the date that you received them.

You will have a loss that you can use to offset any capital gains.  You can only use $3000 of it against regular income each year if you don't have any capital gains to use it against.  But it will carry forward for twenty years.

@alejandrocastro8 

[alejandrocastro8]

Thanks for the information. 

Just to check, I am getting conflicting responses to this same issue. Another tax expert on turbotax replied:         "If you fill out the 4684 and the 8949 TurboTax will carry the relevant numbers to where you need them to be.

Go to the search box in the upper right of your TurboTax screen and type 'form 4684' there.  Then click the 'jump to' link that appears and it will take you to the disaster loss form."

[DianeW777]

Confirmation below and as stated by our tax expert @RobertB4444 an investment loss is not reported on Form 4684. Following the steps below will report it in the appropriate location for an investment loss. Keep in mind that future payments will be reported the same way however you will no longer have a cost basis to recover after 2024.

To enter your sale in TurboTax, follow these steps. 

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link. 
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
3. Answer Yes to the question Did you sell any of these investments in 2024?
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.
   • Click this link for more information. Where do I enter Investment Sales?
   • Enter your full cost basis and the payment you received in 2024 as the selling price, you must enter 2024 as the sell date, however you can use 'Something other than a date' to select Various for the purchase date. You must know whether it is short term or long term holding period. Both may not have basis reported to the IRS ('Covered or Noncovered').

@alejandrocastro8