If you were talked into a fake investment platform, drained by a compromised account, or lost funds when an exchange collapsed, part of that loss may be deductible on your federal return. Most victims never claim it because nobody tells them it exists. This free guide explains the rules in plain English, written for the person it happened to.
What this free guide covers
- Which scams qualify for a theft loss deduction and which do not: the profit-motive line the IRS confirmed in a 2025 Chief Counsel memo (CCA 202511015), covering pig butchering and fake platforms.
- What you can actually deduct, and the balance-screenshot myth: the deduction is built on what you put in, not the fake gains the dashboard showed.
- Which tax year the loss belongs to, the reasonable-prospect-of-recovery rule, and when an amended return goes back to claim it.
- The Ponzi safe harbor (Revenue Procedure 2009-20) and when the 95 or 75 percent route is the cleanest path.
- An evidence checklist: what to save, report, and request starting today.
Who it is for
Victims of investment-style crypto scams, fake trading platforms, and exchange collapses, and the family members helping them sort out what happened.
Get the guide
Enter your name and email and the guide downloads right away.
This guide is for information only. It is not legal or tax advice, it does not create a client relationship, and no specific outcome is guaranteed.
Want your specific case answered?
Noah Green, CPA, CFE, documents crypto fraud losses and prepares the returns and amended returns that claim them. The case review is free and confidential: call (888) 533-3495 or use the Sheepdog Tax contact form. If your facts do not support a deduction, you will hear that in the first call.
Prepared by Noah Green, CPA, CFE