How to Account for Capital Gains Loss from Pre-money Stock Grant?

[Miles_KR]

Hello,

In 2017 I was granted stock in a startup prior to receiving funding. At the time I filed an 83b election. In 2021 the company filed for bankruptcy and the stock became worthless.

Since I was granted the stock prior to the business receiving funding, I am confused about how to apply the capital gains loss.

The purchase price (amount I paid): $2.44

Fair market value (in the grant agreement, and listed in my 83b election as gross income): $1,945.28

When filling in the form for the capital gains loss, what value to I enter for the cost basis?

Thank you!

[JulieS · Accepted solution]

Your basis in this stock is the amount you actually paid for the stock plus the amount you paid taxes on when you filed your 83b election.