Fraud/Scam Crypto Loss

[mrmpatel86]

Hello I was a victim of crypto fraud and the crypto in my Coinbase account was transferred to the to fraudsters/scammers account.  I filed a police report etc but most likely will never get funds back.  However, since I was scammed into giving access to my account guess I am liable for any tax, right? would be final insult if I had to pay tax is there a way to let IRS know that transitions not made by me?

[AmyC]

Follow these steps to report the loss of income producing property:

1. If Coinbase issues a 1099-DA showing the transfers as sales, you will report then on your return but show the proceeds as $0 and use adjustment code L and follow the prompts for stolen/ theft.
2. Report the theft on Form 4684. See @MarilynG1  here for instructions. Be sure to select that this is Business or Income Producing property You will claim what you paid rather than the fair market value.

Be sure to keep all your records as this is a high scrutiny area by the IRS.

See What To Know About Cryptocurrency and Scams - FTC