by Noah Green CPA CFE | Jun 20, 2026 | Scam & Theft Loss Deductions
The short version 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 loss has another, narrower path. Many scam-loss questions turn on the middle category: a loss...
by Noah Green CPA CFE | Jun 20, 2026 | Scam & Theft Loss Deductions
The short version 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 tax treatment can be very different. The special Ponzi safe harbor is not a general rescue rule for...
by Noah Green CPA CFE | Jun 20, 2026 | Scam & Theft Loss Deductions
The short version 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 cannot be recovered. For an individual, IRC 165 usually asks whether the loss fits one of the allowed...
by Noah Green CPA CFE | Jun 20, 2026 | Scam & Theft Loss Deductions
The short version 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 the reasonable prospect of recovery rule can delay that year. For theft losses, IRC 165(e)...
by Noah Green CPA CFE | Jun 20, 2026 | Scam & Theft Loss Deductions
The short version A scam loss is not automatically deductible just because the loss was real, painful, or reported to law enforcement. The most important question is usually whether the loss arose from a transaction entered into for profit, which is the IRC 165(c)(2)...
