Submitted By: someone
Answered: June 7, 2021 12:01 am

We were victims of the “grandparent” scam and lost $14,000. Can we deduct this?

Scammers posing as a grandchild get grandparents to send money to them on the ruse that the grandchild has been hospitalized, is in legal trouble, or has been detained in a foreign country. However, because no deduction for thefts is allowed in 2018 through 2025 (other than those in a federally declared disaster), there is no tax relief for this scam. The only action available is to report the incident to the local police, the Federal Trade Commission, and for wire-transfers to Canada, the Canadian Anti-Fraud Centre.

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Tax Glossary

Lump-sum distribution

Payments within one tax year of the entire amount due to a participant in a qualified retirement plan. Qualifying lump sums may be directly rolled over tax free, or, in some cases, are eligible for current tax under a favorable averaging method.

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