Report capital loss for funds lost in the bankrupted crypto firm?

[yatoshura]

I have some USDC deposited in the now bankrupted Celsius crypto firm for their high-yield earn program. Now that I can no longer claim my USDC deposit, will I be able to report that as a capital loss on my tax return?

[DavidD66]

Yes, you have determined that you will not be able to recover your investment, you can report it as a loss.  You will have to enter "sales" transaction" with $0 in proceeds.  

[yatoshura]

Thanks for the response.

My fund has be inaccessible since last year when the firm made the public announcement so I have very little hope that I can recover it. If I claim the fund as a loss on my 2022 tax return and later on (perhaps years from now), I'm able to recover the fund, then do I need to amend my 2022 tax return to remove the claimed loss? What would the process look like?

[DavidD66]

You wouldn't have to amend your return.  You would just claim it as a gain in the year you receive it.