How to report the money loss by a fraud? I was involved in a fraudulent event by a scammer. I lost a lot of money.

I took money out of my Roth IRA account and Rollover IRA account and wired to a scammer. IRA considered the money I took out of the IRA as the income but I did not use that money. I wired the money to the scammer. I need to report it as the loss, not my income.

381

Level 15

Apr 14, 2021 7:54:20 PM

I have bad news for you. The money you withdrew from your retirement accounts is your taxable income, the law doesn't care how you spent it.

Then, the deduction for theft losses was eliminated by the 2017 tax reform act for tax years 2018-2025. There may still be a theft loss deduction in some states, but on your federal return, you have to report the income and pay the taxes and you can't deduct the loss.

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How to report the money loss by a fraud? I was involved in a fraudulent event by a scammer. I lost a lot of money.