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Madoff And Ponzi - How To Report Your Tax Obligation

By californiataxattorneyblog-1

A new IRS Ruling addresses the tax treatment of losses from criminally fraudulent investment arrangements that take the form of "Ponzi" schemes. The Ruling holds that the losses are theft losses and provides guidance on the character, timing and amount of the loss deduction. A new IRS Revenue Procedure provides an optional safe harbor method for eligible taxpayers to deduct theft losses from criminally fraudulent investment arrangements that take the form of "Ponzi" schemes. The safe harbor method provides a uniform, simplified method for eligible taxpayers to determine the amount and timing of their theft loss deductions.

Full post as published by California Tax Attorney Blog on March 18, 2009 (boomark / email).