I transferred cryptocurrency to a digital wallet which later got corrupted and can no longer be accessed. How can I account for the lost value?

[KittyM]

Cryptocurrency is an asset, and if its value has become zero, then you report "zero" as the sales price and report the date the file became corrupted as the date of sale.

Be aware that the IRS scrutinizes cryptocurrency transactions very carefully and be certain to keep all your backup information in a safe place.

If you are later able to access your digital wallet and recover your money, your basis (purchase price) in any transactions will be zero.