How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Merlo Your Own Question
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
Type Your Tax Question Here...
Merlo is online now
A new question is answered every 9 seconds

400,000 ponzi loss-what can i write off in 2009

Resolved Question:

400,000 ponzi loss-what can i write off in 2009
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello south,


The IRS treats losses from a ponzi scheme as theft losses.


To deduct theft losses, there is first a $500 deductible which applies. After deducting the first disallowed $500, you must further reduce your loss claim by 10% of your adjusted gross income. The balance of the losses may then be claimed as an itemized deduction on Schedule A of your tax return.


If your casualty or theft loss deduction causes your deductions for the year to be more than your income for the year, you may have a net operating loss (NOL). You can use an NOL to lower your tax in an earlier year, allowing you to get a refund for tax you already paid. Or, you can use it to lower your tax in a later year. You do not have to be in business to have an NOL from a casualty or theft loss.


Here is a link to the IRS publication 547 which discusses in more detail how to deduct a theft loss.


If this was helpful please press the Accept button. Positive feedback is also appreciated.


Thank you south



Merlo and other Tax Specialists are ready to help you

Related Tax Questions