Do I need to report stolen crypto on my taxes?

In the US, casualty and theft loss deductions for non-business property were eliminated by the Tax Cuts and Jobs Act through 2025, except for federally declared disasters. That means most individual crypto scam losses currently cannot be deducted.

However, two specific carve-outs exist: (a) theft losses in a transaction entered into for profit (Section 165(c)(2)) can still be deductible — and many crypto scams qualify because the victim was pursuing investment income, and (b) if the loss qualifies as an abandoned-asset claim, different rules apply.

This is genuinely worth a one-hour consultation with a CPA who handles crypto. The savings on a $50k+ loss can be significant. Don't rely on general internet advice for this — facts matter.