STOP THIS before it gets started!

[Joanne98]

Investors With Madoff May Get Tax Relief

For the legions of investors who appear to have been swindled in Bernard L. Madoff’s giant Ponzi scheme, there may be a little relief.

Tax rules allow investors who fall prey to criminal theft perpetrated by their investment advisers or brokers to claim a tax deduction stemming from their losses, The New York Times’s Lynnley Browning reported.

The rules, which are in part tied to definitions under state theft laws, could potentially put hundreds of millions or even billions of dollars, in the form of tax breaks, back into the pockets of Mr. Madoff’s stunned investors, including the publishing magnate Mort Zuckerman; the owner of the New York Mets, Fred Wilpon; and wealthy investors from Palm Beach to Europe.

But it is unclear whether the Internal Revenue Service will see things that way. The agency, which never comments on issues specific to individual taxpayers or cases, declined on Monday to discuss whether it would allow Mr. Madoff’s investors to use the theft-loss rule.

Gary A. Zwick, a tax lawyer at Walter & Haverfield in Cleveland, told The Times, “It’s fair to say that many people will take the position that the theft loss rules will apply, but the government may not take that approach.”

Under the rules, investors can deduct their losses against 90 percent, and in some cases all, of their adjusted gross income. So an investor who lost $1 million to Mr. Madoff and whose adjusted gross income is $600,000 can claim a tax loss of $939,900. That is the result of $1 million reduced by 10 percent of the adjusted gross income, and minus a $100 fee that is applicable under I.R.S. rules, according to Robert Willens, a tax and accounting authority who provided the example.

Continued>>
http://dealbook.blogs.nytimes.com/2008/12/16/investors-with-madoff-may-get-tax-relief/

They went to Las Vegas. They lost and now they want BAILOUT MONEY!

[elleng]

1. This is perfectly reasonable.

"Tax rules allow investors who fall prey to criminal theft perpetrated by their investment advisers or brokers to claim a tax deduction stemming from their losses."

There's NO REASON to deprive people of legitimate tax breaks just be cause some don't like the idea that investors may make money. Anyone here have parents/grandparents who live off their investments' returns?

[Joanne98]

2. Where's it going to come from? Not the federal government I hope!

We need that tax revenue for the starving, unemployed, sick and homeless!

[geckosfeet]

3. Some of his victims were elderly and retired and relied on that income.

Now they have neither the income nor the capital.

I agree that many were simply looking the other way, but many had neither the ability or the inclination to sniff out the scam - although the fact that he called it a hedge fund should have been a big clue.

[elleng]

4. 'claim a tax deduction'

.

[steelworkers]

5. this could be bad news

this could be bad news