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I have $100,000 deposits in a savings account. The bank ...

Customer Question
I have $100,000 deposits in...
I have $100,000 deposits in a savings account. The bank collapsed and I did not recieve anything for my deposits. The bank was chartered by the state and not insured by federal law. What would my options be in deducting the loss on my return? Whan advantages can be taken for the loss on the tax returns? AGI--$110,000 and no capital gains for the year.
Submitted: 12 years ago.Category: Tax
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Answered in 3 hours by:
11/16/2005
Tax Professional: Jon Andrews, Certified Public Accountant (CPA) replied 12 years ago
Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3,118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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This is a deductible loss under Section 165.


There are several possibilities and I suggest that you sit down and go over your specific facts and circusmtances with a qualified local CPA or tax attorney.


Generally, you can elect to treat the loss as a casualty or theft loss. Using this treatment allows a deduction but the deduction will be less than the entire amount because of the various limitations that come into play on itemized deductions in general and casualty and theft losses in particular.


Additionally, you may be able to treat up to $20,000 as an ordinary loss not subject to the itemized deduction and casulaty loss rules.


Depending on which option(s) you choose, there may be an affirmative election that will be required with your tax return. It will be important that this election be completed and filed properly so that you do not lose any tax benefits that you are entitled to.


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To ensure compliance with requirements imposed by the IRS, you are hereby informed that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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Customer reply replied 12 years ago
THE REASON WHY I DID NOT ACCEPT, MY FELLOW STUDENTS AND I CAME UP WITH ANOTHER QUESTION FOR OUR EXAM. WE WANTED SOMETHING THAT WE WOULD BE ABLE TO ANSWER ON OUR OWN. WE GREATLY APPRECIATE YOUR HELP, AND WE ARE SORRY FOR THE INCONVIENENCE. WE HOPE THAT YOU MAY CONTINUE TO WORK WITH US IF ANOTHER MAKE SHIFT PROBLEM ARISES.
THANK YOU FOR YOUR TIME, Customer
Tax Professional: Jon Andrews, Certified Public Accountant (CPA) replied 12 years ago

Perhaps someone will "work with you" to provide you a free answer to YOUR question - but I will not.


There is a method for taking down questions that you decide you do not want answered. As it is, you have wasted my time and effort.


jon

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Jon Andrews
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