Why You Can't Write Off Crypto Hacks on Your Taxes

Got hacked? The IRS has bad news. Losing your funds to theft or user error is no longer a valid tax deduction. Many investors assume that if their crypto is stolen or lost, they can at least claim it as a loss to lower their tax bill. But thanks to a major change in tax law, that safety net is gone. Here is why your lost crypto doesn’t count as a tax loss: Step 1: The Misconception → You buy $10,000 of Bitcoin, but your wallet gets hacked and the funds are stolen. You might think you can write off that $10,000 loss, but you can’t. Step 2: The Law Change → The Tax Cuts and Jobs Act of 2017 eliminated the deduction for “casualty and theft losses” for personal property. This means the IRS no longer allows you to deduct stolen crypto. Step 3: No Exceptions for Mistakes → This rule a