My client was instructed by her employer to wire fund to a brokerage firm to purchase company stock, but a scammer got into the employer computer, changed routing instructions, and the client lost her money in a wire fraud scheme. Bank, employer, and FBI did not think this would be recovered. Would a wire scam fraud like this be a casualty loss in 2022, or are these scams no longer deductible?
These type of loses are still deductible if you itemize, and the loss is more than 10% of your AGI + $100.
@Terry53029 Isn't this just a personal Theft Loss? And with no disaster, there is no deduction, right?
No this was a personal loss. The company never received the funds since the scammer was able to change the wire instructions.
Yes, that's what I'm not clear.. I thought these kind of scams (other than Ponzi scams) were no longer deductible as of 2018? Basically, the CEO's company computer was hacked, and the scammer was able to change the wire instructions, sent out the instructions to the client, and she sent the money using a fraudulent wire instructions. She thought she was sending it the company's brokerage account to purchase stock.
@TaxGuyBill yes it is a personal loss, and not deductible. I had just finished a theft loss for a business, and had a senior moment as the TCJA took that away for personal loss
If this was done with/on company property, then I would investigate if the business has insurance coverage, such as IT Fraud protection. It's not the same as the employee using their home computer, in other words.
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