IRS Commissioner Douglas H. Shulman testified Tuesday before the Senate Finance Committee that according to new IRS guidelines, victims of Bernard Madoff’s Ponzi scheme will be able to deduct up to 95 percent of their investment loss. The guidelines cover victims of all Ponzi schemes, not just Madoff’s.
Accounting Web reports that the IRS plan allows investors to claim a
theft-loss deduction equal to 95 percent of their investments, minus any withdrawals, reinvested gains, and payouts from the Securities Investor Protection Corporation. Those who are suing third parties involved in the Ponzi scheme, and therefore have hope of recovering some of their losses, can claim a deduction equal to 75 percent of their investments. Under the plan, investors must claim the loss as having happened in 2008.
The IRS will also provide a “safe harbor” that allows Madoff victims to claim a theft loss deduction now, even if there is a chance they could recover some of their investment loss later.
Sen. Charles Schumer of New York commented that the plan will prevent victimized investors from “owing taxes on income that they never received.”
[…] IRS: Madoff Victims Can Deduct Up to 95% of Investment Loss by Bruce Carton of Securities Docket […]
So let me understand this IRS plan. If I get sucked into a bad deal and lose money, the government will let me write it off? I bought this mutual fund in 2007. It sucked and I lost my money. So I guess I can write it off? How about that Super Bowel bet in 1997 where I lost $25?
So any fool that makes a bad deal and is cheated, can have a write off? Our country is screwed until people take responsibility for their own STUPID thinking.