Treatment of lost coins that are being slowly reimbursed (USA)

I lost thousands of DAI in a hack on a staking platform. The platform is recompensing users with a two-year payback in their own token.

I need to do something so that my original loss is recognized, while the repayments are treated as something other than income with a zero cost basis.

How best to handle this?

  1. Mark the original DAI as lost and the subsequent repayments as income.

  2. Do not mark the DAI as lost and do not count the repayments as income. Treat it like a swap.

  3. Treat each repayment as a trade, using a proportional amount of the original DAI

… any other ideas? Thanks,

My accountant recommended, I just treat it as a Capital Gains loss (2 Trades), and then each compensation payment as “Income”. So at least my tax bill will be a bit lower this year.

Thanks. What are the two trades? The first would be buying the DAI? And the second would be selling it for zero dollars?

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