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staceyblair5
New Member

I invested 10,000 in a business in 2016. The business folded in 2019. How do I claim the loss?

 
3 Replies
RobertG
Expert Alumni

I invested 10,000 in a business in 2016. The business folded in 2019. How do I claim the loss?

It depends on how you made the investment.  

 

If you lent money to a business, you would report it as a bad debt, see: How to Report Non-Business Bad Debt on a Tax Return

 

If it was your own business, you would have been reporting gains and losses as they occurred each year.

 

If you owned stock in a business, you would report it as the disposition of stock. See: How do I deduct worthless stock?

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Anonymous
Not applicable

I invested 10,000 in a business in 2016. The business folded in 2019. How do I claim the loss?

you may have invested $10 grand but to take your loss you got to know your basis.  an investment in a publically traded stock would probably leave your basis at $10K while an investment in an S-corp or partnership/llc would require you to adjust the $10K for the profit/losses and distributions. 

DavidS127
Expert Alumni

I invested 10,000 in a business in 2016. The business folded in 2019. How do I claim the loss?

More information about the business investment may help resolve your issue.  For example, what was the nature of your investment (e.g., purchased shares in a corporation or S Corp, purchased interest in a partnership, made a loan to a business); did you receive any income from that investment while it was operating; and was there any other money you spent or received related to this investment?

 

@staceyblair5

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