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The Tax Impact of Ponzi Scheme Investments

In Deductions, Ponzi by Jason B. FreemanLeave a Comment

Victims of Ponzi schemes run by fraudulent investment brokers may not realize for several years that the brokers are fraudulently reporting earned income. In a typical Ponzi scheme, the broker represents to the investor that these dividends are being reinvested. Thus, victims are likely to report such income (e.g., interest) as gross income when filing taxes. When the scheme inevitably …