EVENT DESCRIPTION
Join Eric Lanning and Heather Posey from Frost Law for an in-depth exploration of the complex tax implications surrounding theft losses. As fraudulent schemes like pig-butchering scams, compromised account scams, romance scams, and sophisticated phishing schemes become increasingly prevalent, understanding the criteria for deducting these losses becomes more critical than ever.
EVENT OBJECTIVE
By the end of this session, attendees will be able to:
• Analyze Loss Deductions for Modern Scams: Explain the specific loss deductions applicable to prevalent schemes, including pig butchering, phishing, and impersonation fraud.
• Identify Section 165(c) Requirements: Review the treatment of theft losses under the current tax code, specifically distinguishing between trade/business, for-profit transactions, and personal losses.
• Evaluate the "Profit Motive" Criterion: Determine if a victim’s intent meets the "transaction entered into for profit" requirement, a critical factor for deductibility.
• Assess the Year of Deductibility: Evaluate the subjective and objective tests for the "year of discovery" and the "reasonable prospect of recovery" that can suspend a deduction.
• Navigate Procedural Challenges: Understand current hurdles in defending theft loss claims before the IRS, including required documentation and common points of controversy.
• Calculate Allowable Loss Amounts: Identify how to determine the basis in stolen assets (such as crypto or IRAs) and understand why unrealized gains are excluded from deductions.
