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Tax Loss Write-off for Crypto Fraud

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Expert Guidance on Tax Deductions for Crypto Scam Victims

At Dimov Associates, we understand the distress and confusion faced by victims of cryptocurrency scams. With an alarming increase in such incidents, we have dedicated our expertise to assisting those who have suffered financial losses ranging from $100,000 to $2 million. Our goal is to help you understand your rights and options for claiming these losses on your tax returns.

Understanding Your Options for Deduction:

Victims of crypto scams have several avenues to explore when it comes to tax deductions, depending on their specific situation:

  1. Casualty, Fraud, Embezzlement, or Ponzi Losses: These are considered under specific conditions and might allow for a significant deduction.

  2. Capital Loss Deduction: While the limit for this deduction is typically $3,000, it can be a viable option for some.

  3. Business Loss: In certain cases, losses related to crypto scams can be filed under business losses.

Despite the challenges posed by current tax laws, in many instances, you may be eligible to claim a full or nearly full deduction for your losses.

Key Considerations and Steps:

Our approach involves a thorough assessment of your case to determine the best course of action:

  • Eligibility for Full Deduction: Assessing whether your situation qualifies for a full loss deduction.

  • Qualification Criteria: Understanding the specific requirements needed to qualify for a full deduction.

  • Audit Risk Management: Advising on strategies to minimize audit risk and preparing documentation for defense in case of an audit.

  • Timing of Deductions: Determining the appropriate tax year for claiming the fraud loss.

  • Carryover of Unused Deductions: Exploring options for carrying over any unused deductions when the loss exceeds annual income.

Ready to Assist You

Dimov Associates has successfully assisted numerous taxpayers in claiming substantial deductions for crypto fraud losses. If you find yourself in this unfortunate situation and need expert guidance, please do not hesitate to contact us. Our team is committed to providing you with the support and advice you need to navigate these complex tax issues.

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