I got burned during the Mt Gox era and I feel like a crazy person for asking all my friends to get out of crypto. I've been a boring ETF guy since.

The funny thing is that when the trustee pays out the remaining BTC from Mt. Gox back to creditors, you're going to have some massive gains.

I completely forgot about that and just read that they have 192,000 bitcoins in the trustee. Wow

I occasionally kick myself for buying weed using bitcoin like it's intended purpose in those days. I had quite a bit. lol.

I got a really sweet carbon fiber bicycle from the coins I mined. Figured there was no way they'd ever go higher than 20$ and it was basically free money. Looking back, sure, I could have retired on that sum if I'd held it, but at the time, I had no reasonable expectation that it would be anything but a fad.

Won a few races on that bike, and met my wife on the race team. Net win.

"Sometimes, not often, but sometimes I wish my wife was still Bitcoin."

Gives a new meaning to "wife changing gains".

The trump tax cuts removed loss from theft and third-party business failure as permissible write-offs.

You just gotta eat it.

This is a positive tax reform. Why should taxpayers cover losses from people doing little due diligence or placing reckless bets with shady companies?

You aren't covering losses, you're failing to tax gains that didn't materialize. If I fail to get a job, you don't tax me for the income from a job I might have had. This is true even if my reason for not getting the job is really stupid.

This isnt right because capital losses count against capital gains. So, taking a loss allows you to not pay taxes on an equal amount of gains that you would've been taxed on otherwise.

Overall you gained nothing though.

If I give you a million dollar and then steal it back a day later, I feel like you should not pay taxes on it.

Same thing if I give you a million dollar, you buy expensive X thing but the seller goes bankrupt and never delivers anything.

> If I fail to get a job, you don't tax me for the income from a job I might have had.

Yet.

Everyone here is confused.

You only ever got to write off you cost basis but you cannot if the cost is stolen.

Well, for one, the thieves have to claim it as income.

For two, I made no judgment, just stated facts.

It’s not a loss if it was never realized; if he never converted coins to fiat at a loss from the purchase, there is no loss except on paper (and that is not tax deductible).

>It’s not a loss if it was never realized

If I hold stock in a company that goes bankrupt, I can write-off those losses, even though they never get converted to fiat.

Doesn’t this support the opposite?

Ever dollar I pay anyone for services must be claimed as income, yet none of those are capital losses for me. Conversely, none of my capital losses can be claimed as anyone’s income.

>I pay anyone for services

What service exactly am I getting for being robbed?

Conversely, in the correct metaphor, if I buy a fraudulently priced stock for $100 and sell for $0.01, I get to write off the $99.99.

Seems kind of arbitrary that 'a buyer' is the difference between a write-off and not.

Not a lawyer, but my understanding is you can take a theft loss deduction. https://news.bloombergtax.com/tax-insights-and-commentary/vi... (Sorry for your loss.)

You can likely take a casualty loss deduction, but there are some requirements to meet.