Can I Write Off Lost, Stolen, & Scammed Crypto on My Taxes?
Director of Tax Strategy
Miles Brooks holds his Master's of Tax, is a Certified Public Accountant, and is the Director of Tax Strategy at CoinLedger.
Head of Tax Strategy
Jordan Bass is the Head of Tax Strategy at CoinLedger, a certified public accountant, and a tax attorney specializing in digital assets.
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After the Tax Cut and Jobs Act of 2017, lost and stolen cryptocurrency is no longer tax deductible in most circumstances.
Typically, the best way to receive tax benefits is to sell or otherwise dispose of your cryptocurrency at a loss.
If your exchange went bankrupt, you may be able to claim a capital loss on your tax return.
Frequently asked questions
Can crypto theft be traced?
All transactions on blockchains like Bitcoin and Ethereum are publicly visible and permanent. However, cryptocurrency transactions are irreversible, making it difficult to recover stolen funds.
Can I write off taxes if I sent crypto to the wrong address?
Negligently losing your cryptocurrency is not considered tax deductible following the Tax Cuts and Jobs Act of 2017.
Can you claim crypto theft on taxes?
Stolen crypto cannot be claimed as a tax deduction after the Tax Cuts and Jobs Act of 2017.
Can I claim a tax deduction on rug-pulled crypto/NFTs?
It’s likely that you’ll need to dispose of your rug-pulled crypto-assets to claim an investment loss and offset capital gains.
Do I have to report crypto on taxes if I lost money?
If you disposed of your cryptocurrency at a loss, you can offset your capital gains and reduce your tax bill for the year.