losing 80% term is confusing did the fund go to zero, he indicated he got paid 60K. the exact term he used was they returned to him.the fact he paid taxes on it means nothing in the grand scheme of things.
No one "paid" him 60K. He invested 300K in the IRA into the scheme and the value of the "investment" tanked 80%, so he lost 240K of a 300K investment, leaving him with only 60K as "proceeds" from the "investment"
The fact he paid taxes on gains do matter because if he "returns" half his "gains" back to the trustee, then he should be entitled to half his capital gains taxes back. He really needs to talk to both a CPA and a securities lawyer