The Senior Partner's otherwise unassuming neighbor, Martin, has been trading in crypto currency.  Unfortunately, last month, Martin's $1 million position in FTX went belly-up.  Given this development, Martin now wants to know what, if anything, he can deduct on his taxes due to this loss.  Is this an investment?  A Ponzi scheme casualty loss?  What type?  A theft?  A bad loan?  A gambling deduction (not really)?  Is there anything specific you would ask him?

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Martins loss in cryptocurrency trading could potentially be classified as a capital loss for tax pur... View the full answer