Deductibility of loss from a fraudulent stock investment abroad?
September 4, 2019 | 30,00 EUR | answered by Steuerberater Knut Christiansen
Unfortunately, I lost money in stock investments to a financial institution in Japan. The scammers disappeared with the money after a while. A report was made to the German public prosecutor's office but it was dismissed.
Thank you in advance for your assessment.
Good morning,
In my opinion, there are two possibilities to consider for the potential recognition of a loss from stock trading, with the case at hand being quite unique. Therefore, I can only provide a preliminary, non-binding assessment. The assessment is based on the specific circumstances as well as the fee involved.
One option could be to claim the loss as a worthless securities deduction. You can find information on this here: https://blog.handelsblatt.com/steuerboard/2019/04/26/steuerlich-anzuerkennender-verlust-auch-bei-ausbuchung-wertloser-aktien/
Of course, you would need to have owned the stocks and provide evidence of the worthless securities deduction or the final loss.
The second possibility to consider would be the loss of a private loan receivable, if the money was only passed on to acquire the stocks but the stocks were never actually purchased. In this case, the following judgment may be relevant to you: https://blog.handelsblatt.com/steuerboard/2018/04/09/endgueltiger-ausfall-privater-darlehensforderungen-fuehrt-zu-steuerlich-abziehbarem-verlust/
You should definitely report the loss in the KAP attachment of your income tax return. If the tax office does not recognize the losses, you would need to assess whether an objection or subsequent legal action could be successful.
Kind regards,
Knut Christiansen
Tax advisor
