So Your Crypto Was Stolen

There’s no good news here. You’re basically out of luck.

And the reason for that - is The Tax Cuts and Jobs Act of 2018.

Previously, theft losses were deductible as a miscellaneous itemized deduction on Schedule A. You would have to subtract $100 from the value of the loss, and then anything in excess of that could be deducted. 

But, you would have to have your itemized deductions surpass the standard deduction to even take advantage of that.

Now? You can only deduct casualty/theft losses that are the result of a governmentally-declared federal disaster.

So if you spent $30k on crypto, then your wallet gets hacked and your crypto stolen, there are no tax-benefits you can take advantage of from that loss.

Interestingly enough, this is one of the provisions that sunset after 2025.