Cashapp bitcoin scam

[user17700551882]

Back in September of 2025, I was a victim of a cashapp bitcoin scam where essentially all I did was buy bitcoin and send it to someone else's wallet. Do I need to report anything at all this tax season? I have never previously used bitcoin or have made any transactions with bitcoin.

[DianeW777]

Yes, it's possible to file Form 4684 due to a Ponzi scheme or 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.

[user17700551882]

The scam wasn't a ponzi scheme. I'm over the fact that it happened, I just don't want to get in trouble if I don't report anything at all. Like I said, all I did was buy bitcoin and send it to someone else via cashapp , so essentially it was a gift. I was just wondering if I would need to report anything from that event. 

[DianeW777]

You are correct, it was an investment scheme. In the tax law both are discussed together in the Form 4684 instructions. If you gave it away and it's less than $19,000 there is nothing to report. If this is simply an investment loss you can report it as such.

• Where do I enter investment sales?

It's possible it would be considered as a worthless investment as long as you have the records to show your total investment and when it became worthless. 

Based on your description, it seems like your invested funds were stolen in which case the original answer would apply. It's completely up to you if you want to include this in your tax return.

[user17700551882]

So to clarify, it's fine if I don't report anything at all? It wasn't a huge amount of money that I sent (a couple hundred above a 1000), so I'm not really angry about it anymore . I simply just want to forget about it but I'll report something if I need to.

[Mike9241]

There is nothing wrong with not reporting it. Gifts are not deductible. But if you were fraudulently induced to make the gift that's a different story as long as you were holding the BC as an investment. 

[user17700551882]

No, I wasn't holding any bitcoin. It was unfortunately an extortion scam, so I had bought the bitcoin on cashapp and immediately sent it to the other person. I will just treat it as a gift and not report it.