Discussion:Investment loss or theft
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Revision as of 19:02, 2 June 2008
Discussion Forum Index --> Advanced Tax Questions --> Investment loss or theft
Discussion Forum Index --> Tax Questions --> Investment loss or theft
| June 2, 2008 | |
| I hope this is not too long of a question, but I really would like your inputs:
1) In 2002, Client inherited $100,000 from fathers estate. 2) Nov 02, She wrote check for $100,000 to Investment Club Partnership(alias). Got receipt. 3) In 2003, Club had a loss, K-1 was issued showing $17,845 LT capital loss, $101 in interest and $180 in deductions. 4) 2003 Tax Return used $3000 of the loss. 5) 2004 TR used $3000 of the carryover, but no K-1 issued otherwise. 6) 2005 and 2006 no carryover loss used and no K-1 issued. 7) In 2005, she filed lawsuit against owner of Club. 8) In 2006 won lawsuit. 9) Owner convicted of selling unregistered securities, self-dealing, fraud and deception. 10) He was ordered to pay back principal ($100,000) and costs totaling $170,714 + interest. 11) As of 3/11/08, $4864 paid and balance has increased to $198,882. Now: Do I treat this as a investment loss, and in what year? Or do I treat this as a theft loss, and in what year? I can amend prior years if needed. I don't want to lose any benefit of the loss, so I don't think I want to carry it back past 2004, can I elect this? Also, what basis do I use? Should I use $100,000 or, say 94,000? And going forward, does she have to claim any repayments as income? She is not a high income person, AGI about $30,000 and shes over 65. Thanks you for your advice. I often read the discussions, but have not posted for years. | |
