Lost money due to a fraudulent business and lawsuit fighting it over a few years. Can I claim all of the loss now due to court judgement or have to refile past returns?

Forum|Forum|1 year ago
January 19, 2025
2 replies
0 views

loss to fraud and or law suit.

Best answer by xmasbaby0

Sorry. Losses due to theft or fraud have not been deductible since the tax laws changed for 2018 to 2025. Only losses that result from being in a federally declared disaster area are deductible or losses from a Ponzi scheme.

xmasbaby0Answer

Employee

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

LeticiaF1

As xmasbaby0 said, during tax years 2018 through 2025, the only losses individuals can deduct are the ones caused by a federally declared disaster. If you are a business, you can still claim casualty losses for business property. This change was part of the Tax Cuts and Jobs Act of 2017.

Casualty losses are deductible in the year you sustain the loss, which is generally in the year the casualty occurred. You haven't sustained a loss if you have a reasonable prospect of recovery through a claim for reimbursement.

A theft loss deduction is available if the loss is due to a transaction entered into for profit. The theft losses can be deducted on the year the property was stolen. If you have a possible claim for reimbursement, then they are deducted on the year when you can decide if you will get a reimbursement or not.

For more information refer to:

Topic no. 515, Casualty, disaster, and theft losses