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Lehman Tax Law > Blog > Ponzi Schemes Tax Laws > 2017 Tax Law Changes And Tax Refunds From Ponzi Scheme Losses

2017 Tax Law Changes And Tax Refunds From Ponzi Scheme Losses

Tax Refunds From Ponzi Scheme Losses By Deduction Of Those Losses:

  1. Prior to the Trump Tax plan by claiming losses in year of discovery they could be carried back for a three year period plus carry forward of 20 years of losses. This is not the case anymore. It could be an important difference.

  2. The only amount of losses that can be claimed in the year of discovery are losses for which there is no reasonable prospect of recovery. Losses cannot be claimed if there is a reasonable prospect of recovery.

  3. Losses not taken in the year of discovery are recoverable only when the taxpayer can show with reasonable certainty that there will be no additional recoveries in the future. The “reasonable certainty” standard is more difficult to prove than the reasonable prospect of recovery standard. New tax law does not permit the taxpayer to claim a loss in the year of discovery and carry back those losses for three years prior to the discovery year.

  4. New tax laws focuses on the discovery year and then only allows losses to be carried forward after the discovery year.

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