4684 and Ponzi Scheme Question

Forum|Forum|6 years ago
May 31, 2020
9 replies
83 views

I have TT Deluxe 2019 and have attached the form 4684 (via going to "forms" in TT and using "open form") and filled in the information relating to a Ponzi scheme loss incurred in 2019. I notice that after filling out the worksheet that only pages 2 and 3 are attached to the return (as they are the only pages that numbers and info is populated on if due to a Ponzi scheme). However Page 1 of form 4684 is not attached, nor can I seem to get it attached although all it would be is a blank page 1 (except my name and SSN at top). My question is: is this ok to file with only pages 2 &3 attached of form 4684 as it relates to Ponzi scheme theft? Or do I need page 1 of this form as well? And if so, how do I get TT deluxe to attach page 1?

Thank you for any assistance you can offer.

macuser_22

Alumni - Champ

Sorry, but the TCJA (Tax Cuts and Jobs Act) eliminated casualty and theft losses (other than for certain disaster caused losses) for tax years 2018-2025. Ponzi losses are no longer deductible on a Federal tax return. The form is still there to report disaster losses and for some states that still allow the loss on a state tax return.

The TurboTax interview mode should inform you of that, but if in the forms mode than you are on your own to understand the current tax law. See screenshot. Such losses can only be used as a capital loss to offset capital gains.

See Pub 547 page 2

https://www.irs.gov/pub/irs-pdf/p547.pdf

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

sortofredAuthor

Level 2

Thank you for your response however I looked at the 4684 Tax Form instructions and it still does allow for Ponzi losses that meet certain criteria according to Revenue procedure 2009-20, which mine does.

So, my question as to attachment of just pages 2-3 of the form or if I need to also have page 1 of the form attached as well (although in factt it would not have any figures on it) would still be viable I believe.

macuser_22

Alumni - Champ

The instructions say no. It says section C (Page 3) and section B (Page 2) only.

If you qualify to use Revenue Procedure
2009-20, as modified by Revenue Procedure
2011-58, and choose to follow the procedures
in the guidance, first fill out Section C to
determine the amount to enter on Section B,
line 28. Skip lines 19 to 27. Section C of Form
4684 replaces Appendix A in Revenue
Procedure 2009-20. You don't need to
complete Appendix A.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**