IRS Ponzi Scheme Deductions

1 reply [Last post]
Adam Smith's picture
User offline. Last seen 9 years 41 weeks ago. Offline
Joined: 02/27/2009
Posts:

So apparently the IRS is now allowing people to deduct more of their losses in Ponzi schemes:

http://www.reuters.com/article/newsOne/idUSTRE52G5F920090317

Obviously this is a reaction to Madoff, but it makes me wonder why there wasn't such a deduction before.  If I've had my life's savings stolen I'd think it would be nice if I could at least get a deduction for that.  I made 1 million this year before it was all stolen, so in addition to having nothing, I need to pay taxes on a million dollars?