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PM

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Reply with quote  #16 
My (criminal) loss amount is 30% less than the actual amount of loss.
The price of metal purchased didn't go down that much.
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gvag

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Reply with quote  #17 
Hello, 
   I didn't claim the capital loss from bankruptcy till now. No that I have the reimbursements from the proceedings, can I  file for capital loss this year even though the BD went bankrupt in 2015? 


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tboll

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Reply with quote  #18 
I'm also NO tax professional but I do see why the DOJ would write off your amount as $25K (based on the value at bankruptcy versus the cost when you purchased).  I wonder if to be technically most correct you would claim the $14K as a capital loss (this was depreciation in the spot price of gold from the time you purchased to the date of bankruptcy) and remaining $25K as theft.   
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JG

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Reply with quote  #19 
Quote:
Originally Posted by gvag
Hello, 
   I didn't claim the capital loss from bankruptcy till now. No that I have the reimbursements from the proceedings, can I  file for capital loss this year even though the BD went bankrupt in 2015? 


I've got some information at http://about.ag/BullionDirectTax.htm .

Assuming you haven't taken any part of the loss in previous years, you should be able to deduct it as a capital loss for the 2019 tax year.

Doing this should be the almost exactly the same as if you had bought a stock (rather than metal), and you sold it at a huge loss last year. If, for example, you paid $20,000 in 2010 (for your metal or a stock), and got a check last year for $1,000, you would end up with a capital loss of $19,000 (regardless of any other numbers: it's not higher or lower based on the spot price at any time in between when you paid and when you received the check). The only difference that I can think of in this analogy is that metal is treated as a collectible (which usually involves checking the "collectible" box in tax software).


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JG

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Reply with quote  #20 
Quote:
Originally Posted by tboll
I'm also NO tax professional but I do see why the DOJ would write off your amount as $25K (based on the value at bankruptcy versus the cost when you purchased).  I wonder if to be technically most correct you would claim the $14K as a capital loss (this was depreciation in the spot price of gold from the time you purchased to the date of bankruptcy) and remaining $25K as theft.   


Here is my understanding. Let's assume someone paid $20,000 in 2010 for silver, worth $15,000 in 2015, and got a check for $1,000 in 2019.

The DOJ says Charles McAllister stole $15,000 from you. That's because if just before filing for bankruptcy you sold your metal, that's what you would have asked him to write it for. They don't know or care what you paid, or if you have a gain/loss.

The bankruptcy court says that you are a creditor owed $15,000. That's for the same reason: that's how much you are owed by the company. They don't know or care what you paid, or if you have a gain/loss.

The IRS, however, sees it differently. They want to know how much you lost. Assuming someone is treating this as a capital loss, they look at what you originally paid ($20,000) and how much you got back ($1,000) to determine your loss is $19,000.

The tricky piece has to do with the theft loss (which would require amending a 2017 or earlier return). My guess is that with a theft loss you could write off the full amount ($20K in my example, $39K in yours). That's because with a Ponzi scheme you write off the full amount as a theft loss. And that matches reality: if there was no metal on the date of the bankruptcy, then the $15K in my example is a phantom number (there was nothing actually worth $15K at that time).

All of this doesn't answer one of the original questions (why someone with $39K *cash* at Bullion Direct would have it listed as $25K). If Bullion Direct had the wrong number for some reason, the loss would be reported based on the correct numbers (although in an audit the discrepancy would be a red flag).

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napolm

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Reply with quote  #21 
Anyone have update if he is in jail
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JG

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Reply with quote  #22 
Quote:
Originally Posted by napolm
Anyone have update if he is in jail


I've been meaning to post an update about this.

He is not in prison yet.

He was originally scheduled to report to prison at some unknown time around May ("unknown" meaning that the court set a deadline, which is public information, but costs a bit of money to find out). The Bureau of Prisons asked that the deadline be extended to "no later than" July 1 due to coronavirus issues, which the judge allowed. Then, however, a few days before the July 1 deadline, the judge approved a motion by Charles McAllister to delay the beginning of the prison sentence until after his appeal is heard.

Unfortunately, I have no idea at this point how long the appeal process may take.

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tboll

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Reply with quote  #23 
wow, at this rate there is no sure thing that he will ever end up in prison.  
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napolm

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Reply with quote  #24 
Thank you. Jg
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napolm

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Reply with quote  #25 
Any update if he is in prison
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JG

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Reply with quote  #26 
Quote:
Originally Posted by napolm
Any update if he is in prison


Not yet.

You can check at https://www.bop.gov/inmateloc/ by entering 00222-480 as the BOP Register number. Or, easier to remember is to click on "Find By Name" and enter "Charles" as the first name and "McAllister" as the last name (there are currently 5 listed there; he is currently the one on top, 50 years old).

When the "NOT IN BOP CUSTODY" changes, that will be a clue that something is up.

My guess is that it may be at least a few more months, quite possibly longer.

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napolm

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Reply with quote  #27 
Thank yu. Jg... I am surprised there is almost no chatter on this site on his imprisonment
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