I was a victim of wire transfer fraud, can i deduct the loss

[potlurin]

I have reported the fraud with the local police station and i have a case with both the originating and destination bank.

[MichelleT]

You may be able to claim a casualty loss for the fraud. 

You can only deduct your losses that exceed 10% of your AGI+$100. In addition, it is an itemized deduction. If you usually take the standard deduction, you'll have to now find additional itemized deductions to exceed the standard deduction. 

In TurboTax, enter at:

Federal Taxes Tab 

Deductions & Credits

  -Scroll down to:

   --Other deductions & Credits

     ---Casualty & theft

Or type- casualty loss -in the search box

For more info, see:

http://www.irs.gov/pub/irs-pdf/i4684.pdf

[potlurin]

I reviewed i4684 and it appears most of the information appears to be related to property. The wire fraud that i was subject to was related to the closing on my new home. The amount that i should transfer to the title company got to a fraud account. Please let me know how i can interpret this into the form 4684

[xiaoliling2]

I had the same situation and wondering whether it is tax deductible. 

[JohnW152]

You’re no longer allowed to deduct such losses.  

The deduction for personal casualty or theft losses has been eliminated for Tax Year 2018 through Tax Year 2025, unless the loss occurred in a federally-declared disaster area and was directly caused by the disaster.

Please see Limitation on personal casualty and theft losses in the 2021 Instructions for Form 4684 for more information.

@xiaoliling2

[xiaoliling2]

what if the loss is  associated with the purchasing rental property. 

[MarilynG1]

Can you clarify what you mean by a 'loss on purchasing rental property?'

Do you mean you had a loss when selling your rental property?

Click this link for info on How to Report Sale of Rental Property.

You may own rental real estate that you need to sell at a loss. To help ease the pain, losses from selling rental properties generally receive favorable tax treatment.

Here's a detailed article on Selling Rental Property at a Loss.

[xiaoliling2]

when I purchase rental property, a fake scammer send me the wire information to send the closing cost. And later it turns out to be scammer. I lost my money during this transaction. Can I claim the deductible?

[ThomasM125]

Your loss is probably not deductible. The loss would have to be associated with a business to be deductible. Unless you are a real estate dealer, meaning you earn your livelihood purchasing and/or renting out real estate, the attempted purchase of a rental home would not be considered a business activity. You can't report a rental activity and then simply deduct the loss on the deal you experienced. It would only be deductible against rental income, which you don't have as the house was never purchased or rented out.

@xiaoliling2  

[xiaoliling2]

It is not rental event. I purchased the property, but I paid twice closure cost, one is sending to scam account. 

[MarilynG1]

You should report this to your bank or credit card company as a fraud.  They will usually refund your lost funds, while they investigate.  

Save documentation of all the details.

[xiaoliling2]

The scammer take the money and the bank does not return the money. I find that is very common after I occurred on me.