Short version is that I bought crypto by way of trading BTC/ETH into the coin of discussion and the blockchain of that coin was shutdown. I can't access the balance in my wallet (and never will). Can I claim this as a loss on my taxes?
Additionally, what can I submit as proof to IRS in case of audit as I only have outgoing transactions from Coinbase (which does provide the cost basis).
I've seen mixed messaging on this topic but this article leads me to believe I can: https://coinledger.io/blog/reporting-stolen-or-lost-cryptocurrency-for-tax-purposes#can-i-claim-a-tax-deduction-on-a-crypto-nft-scam-
Several years ago I made BTC transactions totaling slightly over $1000 to purchase a cryptocurrency that has recently "shutdown". This cryptocurrency development team claims that the overall system was not technologically viable (if you will) and they need to restart with a different code base. In order to get the amount of crypto that was previously held, they instruct us to purchase a voucher of equal amount and then they will essentially double what you had.
The crypto's blockchain is dead, their app and servers are defunct. In fact, I can't capture any screenshot of my held balances or get my address because of this. There is no way for me to interact with any previously held crypto from them without first paying them more money and its at this point that I am walking away.
My question is if I can claim this as a capital gains loss. I have seen mixed information online and when entering this amount in a tax software as an "Stock or Investment Sold" (per info from link above) it adds to my refund amount. Also if I can claim this, how can I prove to the IRS if audited any of this information as pretty much all I have are the originating transactions from Coinbase.