Can money lost via relationship scams be tax-deductible?

[Big_Pete]

I dated and of course met someone overseas for a while. I guess like many other relationship scams, she was asking for a few hundred dollars per month for various reasons. In the end though, she was pushing for several thousand dollars a month. She started threatening extortion and blackmail when I decided enough was enough. I never filed a police report because I wasn't sure sure whether to do it there or here given that it was an overseas relationship.

When I chatted with a few friends about this dilemma, they mentioned similar stories where the girl could extort or blackmail the guy with fake sonogram results claiming she's pregnant only to find out within the appropriate time that she wasn't. 6-7 months after our last intercourse, I managed to sneak into her Facebook account since I originally helped her set it up, finding out she was never pregnant.

The last time I sent her a few thousand dollars in one transfer, she would change excuses why she needed it. At first she said it was to pay for mortgage. Few months later she said it's to pay for her dad's medical bills.

Can money lost in such relationship scams be tax-deductible?

 

[Taxing Matters]

Can money lost in such relationship scams be tax-deductible?

Not after 2017. Congress gutted the itemized deduction for fraud and theft loss when it passed the large tax bill in December 2017. Most such losses that are nonbusiness losses are now not deductible.

 

[Big_Pete]

Not after 2017. Congress gutted the itemized deduction for fraud and theft loss when it passed the large tax bill in December 2017. Most such losses that are nonbusiness losses are now not deductible.

What if the scam happened up to 2017? Can it be considered tax-deductible for 2018 tax return? Or would I need to amend my 2017 return?

 

[Taxing Matters]

What if the scam happened up to 2017? Can it be considered tax-deductible for 2018 tax return? Or would I need to amend my 2017 return?

The loss may only be deducted in the year that it occurred. And it if occurred in 2018 it is not deductible. For losses due to fraud that occurred in 2017 that would be deducted on the 2017 return. You'd have to amend that return to do that. But before you do, make sure you'd get a tax benefit from it. It is an itemized deduction. If you took the standard deduction then you'll need to add up all your itemized deductions and figure out which is the better benefit. If it's still the standard deduction then this won't help you. Also note that there are a few other limitations and details you need to know about. See the 2017 Publication 547.