How Will It Work
In 1965 Izzie Blume puts $10,000 with Madoff, and in 2008 it
compounds to $250,000. Madoff now defaults, but Izzie claims a
$250,000 loss.
Mr Blume's tax bill in 2009 is $125,000, and in 2010 it's $125,000,
he pays nothing. He has a $250,000 credit/refund.