DR CRYPTOCURRENCY

The silver lining if you lost money in the Drift hack is that it could be a decent tax deduction. But TurboTax won't help you document it. Usually, lost or stolen property is not a tax deduction. But when you experience a theft loss while entering into a transaction for profit, you can potentially treat it as an ordinary loss. Unlike a capital loss, this can actually be used to offset your income. In the case of Drift: Pretty much no matter how you look at it, you put funds on there with a profit motive. Either earning interest, or by trading. So how much can you write off? You are limited to the cost basis of what you paid for the assets you lost on Drift. If you had stables on there, the full value of the stables you lost. If you had SOL on there that you bought at the pico top for $12k? Even if it was only worth $4k at the time of the hack you still get a $12k deduction. This is not an automatic or guaranteed write off, however. It is a tax position you should take with the guidance of a licensed tax professional. Especially if you lost a high dollar amount which would attract scrutiny. And we still need to see what type of recovery plan Drift puts in place before you can determine the deductible amount. But bottom line? You could offload some of your losses to the IRS.

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Happy Tax Day, New York. We’re taxing the rich.