Yes, you report this on your personal tax return. You will enter this under the Investment Income area of Wages & Income.
TurboTax will calculate the loss on this investment and determine if it was short- or long-term. If you have other capital gains, the loss will offset some or all of the gains. Otherwise, up to $3,000 of the capital loss will go to line 13 of Form 1040 and offset other income. The remaining loss over $3,000 will be carried forward each year until used up (applied to capital gains and/or ordinary income).
Yes, you report this on your personal tax return. You will enter this under the Investment Income area of Wages & Income.
TurboTax will calculate the loss on this investment and determine if it was short- or long-term. If you have other capital gains, the loss will offset some or all of the gains. Otherwise, up to $3,000 of the capital loss will go to line 13 of Form 1040 and offset other income. The remaining loss over $3,000 will be carried forward each year until used up (applied to capital gains and/or ordinary income).
If you're in the first $1M of funding you can take a direct deduction, how does TT handle that?
"This is the most important tip for most angel investors because IRC Section 1244 gives investors the ability to take an ordinary income deduction on losses rather than the standard capital loss deductions. There are caveats such as needing to be part of the first $1 million of capital raised by the company and a few other requirements."
Not sure what happened with that link but
Hmm the forum is scrubbing the URL for some reason, here's a link....
well this is fun, just remove the spaces in this
https://www.forbes.com/sites/mariannehudson/2014/11/17/ tax-[product key removed]-investor-should-know/#f670dafd0694
https://www.forbes.com/sites/mariannehudson/2014/11/17/ tax- tips- every- angel- investor- should- know/#f670dafd0694