Scam & Theft Loss Deductions
Cut through the noise. Stay up to date on IRS changes, tax tips, and best practices for scam, fraud, and theft-loss victims.
What Documentation the IRS Expects for Theft and Fraud Losses
A theft or fraud loss file needs more than a police report and a dollar total. Before you file or amend, the file should show what property was stolen,…
Amending Returns for Loss Deductions: When It May Make Sense and When It May Backfire
Form 1040-X is a filing mechanism. It is not a strategy by itself.
What Counts as a “Transaction Entered Into for Profit” Under IRC §165(c)(2)?
For an individual, IRC 165 does not treat every stolen dollar the same way. A theft loss connected to a trade or business has one path. A personal theft…
Ponzi Scheme Losses vs. Personal Scams: Why the Tax Treatment Is Different
A Ponzi scheme loss and a personal scam loss can feel similar because both involve deception, missing money, and a victim who acted in good faith. The…
Crypto Scam Losses: When They May Qualify Under IRC §165(c)(2)
A crypto scam loss is not automatically deductible just because the platform was fake, the wallet address was controlled by a scammer, or the funds…
The “Reasonable Prospect of Recovery” Test Explained
A theft or scam loss is not deductible just because the money is gone from your account. Under IRC 165, timing depends on when the loss is sustained, and…
Can You Deduct a Scam Loss on Your Taxes? What the IRS Actually Allows
A scam loss is not automatically deductible just because the loss was real, painful, or reported to law enforcement. The most important question is…
IRC §165(c)(2) and Scam-Related Losses: What May Qualify, What Usually Does Not, and What to Document
A scam loss is not deductible just because the loss is real, painful, or reported to law enforcement. For an individual taxpayer, the key question is…