There may be hopeful news for investors who believe they have been the victim of investment fraud. A provision in the federal tax code called Section 165 may offer potential tax benefits.
If your investment loss qualifies as a theft loss under Section 165, it may be possible for you to deduct the full amount of your loss immediately against ordinary earned income, all in one year. If your loss exceeds your taxable income in that year, you are allowed to get a refund for previous taxes paid. A theft loss deduction, if appropriate, can offer a number of advantages:
There is no limit to a theft loss deduction, unlike the $3,000- per-year capital loss limit. In other words, it could take you 34 years to fully deduct a $100,000 loss as a capital loss.
It may reduce or even eliminate tax payments.
Depending on your circumstances, you may qualify for a tax refund.
According to the experts at a firm called JK Harris 165 Services, an investment loss in which unethical behavior was involved or suspected may qualify an investor for relief under the provisions of Section 165.
When brokers or investment salespeople fail to abide by accepted sales practices and money is lost, that loss may qualify as investment theft. The same is true when an investment was taken with the intent to defraud you or deprive you of it or if the sales process was misleading, unsuitable, or violated any laws. If there is no reasonable expectation of recovering your loss, you may be able to receive substantial tax benefits through a Section 165 accelerated deduction. JK Harris 165 Services can provide a free, no-obligation consultation with a tax professional to help determine if you can benefit from their service, including an estimation of your potential tax benefits.
Similar benefits may be available to an investor who has invested money in a company that has suddenly disappeared-either going out of business or going bankrupt. A Section 165 deduction may be possible depending on the specific circumstances surrounding the bankruptcy.
Described as a leader in assisting victims of investment fraud recover some of their losses, JK Harris 165 Services is an affiliate of JK Harris and Company, the nation's largest tax resolution firm. JK Harris also offers tax resolution services designed to assist people in solving tax problems.
To learn more, visit the Web site at www.165services.com.
An investment lost due to fraud may qualify an investor for a number of tax benefits.
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