Question

Are you allowed to deduct financial loss due to being scammed ?

Forum|Forum|3 years ago
September 18, 2022
2 replies
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I used money in my IRA retirement account which ended up being a scam. Can this be written of as a loss? If so, where?

TurboTax Deluxe Online

Critter-3

Did you have an IRA and use the IRA funds to invest in something that was not legit ?

Or did you take a distribution from the IRA and use that to make the ill fated investment ?

M

Mike9241

if the investment was made within the IRA there is no deduction. what you end up with is fewer assets for eventual distribution. if you took the money out and invested it, current tax laws only allow an itemized deduction for losses from Ponzi Type Schemes. form 4684 section C - read the instructions as you may need help in properly preparing the form. there is also the issue of the proper year to deduct such losses.