By Andrew Keshner
‘Does this somehow fall under gift-tax laws?’
Dear Tax Guy,
My mom went into debt to buy bitcoin for a scammer because she thought she was in a romantic relationship with him. She also racked up credit-card debt to mail computers and gift cards to the scammer.
She’s in debt now for over $90,000 due to this scam, with no relief. She was too embarrassed to admit that she was being taken advantage of at the time, and she didn’t ask for help.
How does she answer tax questions for 2022 about buying bitcoin that she doesn’t even own, or the personal losses that she has endured? Does this somehow fall under gift-tax laws?
P.S. She apparently put cash into the scammers account through a bitcoin machine. This happened multiple times in February 2022. The scammer or scammers have not been caught.
Sad daughter
Dear Sad Daughter,
It’s the cold-hearted con artists who ought to be embarrassed and ashamed of preying on your mother, not her.
Regrettably, your mom isn’t alone. People have submitted nearly 53,000 romance-related scam complaints to the Federal Trade Commission through the third quarter. Hallmarks of the con include requests to wire money, send gift cards or transfer cryptocurrency, the regulator noted.
People last year reported a record $547 million in losses due to these particularly scuzzy scams, the FTC said.
After all the financial wreckage, you’re left wondering if the tax code offers damage control….
