News 09 Apr. 2024
Curtis Announces New Partners and Counsels Across Offices in Spring 2024
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News 25 Jan. 2024
Counsel Mohannad A. El Murtadi Suleiman Addresses “Africanization” of International Investment Law
Event 18 Aug. 2023
Partner Borzu Sabahi Speaks at FDI Moot Shenzhen
News 25 Jul. 2023
Partner Eric Gilioli Ranked in Top 10 Influential Energy & Natural Resources Lawyers in Kazakhstan in Business Today
Client Alert 28 Dec. 2023
U.S. to Impose Secondary Sanctions on Non-U.S. Banks For Financing Russia’s Defense Industry
News 28 Aug. 2024
Curtis Recognized for Excellence in Arbitration in Chambers Latin America Guide 2025
Event 22 Aug. 2023
Partner Dr. Claudia Frutos-Peterson to Speak at Arbitration and ADR Commission of the ICC Mexico
News 15 Aug. 2023
Legal Reader Publishes Article on Dr. Majed Alotaibi’s Arrival as Senior Counsel in Curtis’ Riyadh Office
News 31 Jul. 2023
Curtis Welcomes Senior Saudi Advisor, Dr. Majed Alotaibi, to its Riyadh Office
News 24 Aug. 2023
Curtis Attorneys Quoted in CoinDesk on FTX Founder Sam Bankman-Fried’s Strategy Ahead of His Criminal Trial
Client Alert 10 Jul. 2024
EU Adopts New Restrictive Measures Against Belarus
Client Alert 26 Jun. 2024
The EU Adopts its 14th Sanctions Package Against Russia
client alert
Second Circuit Limits U.S.-Based Discovery for ICSID Arbitrations
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Publications December 2008
The US tax implications of a Ponzi scheme are complex and each investor's situation is unique. Therefore, the comments provided herein are not tax advice but rather illustrative of the tax issues that may arise. Each investor should immediately consult with an experienced tax professional since certain actions that an investor should take may be very time sensitive. The material contained in this Client Alert is only a general review of the subjects covered and does not constitute legal advice. No legal or business decision should be based on its contents.
The following describes some of the tax issues that an investor in a Ponzi scheme may face. To illustrate, consider the following hypothetical taxpayer, Investor A, who in 1998 acquired an ownership interest in a fund (the 'Fund') for $1 million which has never been returned. Each year, Investor A believed (based on his Form K-1) that he was allocated $120,000 of the Fund's income. He paid annual income taxes of $42,000 on such income. In 2008, Investor A discovers that the income purportedly allocated to him did not exist, and his initial investment of $1 million has been used to pay other investors.
Theft Loss Deduction
Filing a Refund Claim for Tax Paid on Allocated Phantom Income
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