turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

dpybus1
New Member

I was a shareholder/employee of a business that went bankrupt. I had to pay money as a guarantor of a loan to the business. How do I deduct that payment?

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply
RobertB4444
Employee Tax Expert

I was a shareholder/employee of a business that went bankrupt. I had to pay money as a guarantor of a loan to the business. How do I deduct that payment?

Your 'basis' in the business is the total amount that you had invested.  That includes the amount you initially sent in as well as any payments that you made to keep the business afloat (or close it) minus the amounts that were given to you over its life.  

 

When your investment becomes worthless you can take a capital loss for the basis that you had invested at the time.  In the wages and income section of your federal return you'll scroll down to the 'Investment Income' section and click start next to 'Stocks, Cryptocurrency, Mutual Funds, Bonds, Other'.  (you're the Other)

 

You'll enter it as a sale of the investment.  You'll enter the purchase date as the first day that you invested in the business and the basis as the amount you already figured out.  The sale date is the date that the investment became worthless and the sale price is zero.

 

@dpybus1 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question