Submitted By: someone
Answered: July 22, 2019 3:09 am

I was scammed out of my retirement account (a victim of identity theft). Can I deduct the loss?

Alert the IRS, credit reporting bureaus, and other agencies that you have been a victim of identity theft. Determine whether this is a theft loss. Determine whether you can recover the funds. Unfortunately, if it’s a theft under state law and you can’t recover the money, you don’t get a tax break for it. For 2018 through 2025, no itemized deduction for a theft is allowed.

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Tax Glossary

Passive activity loss rules

Rules that limit the deduction of losses from passive activities to income from other passive activities. Passive activities include investment rental operations or businesses in which you do not materially participate.

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