You can deduct worthless stock or a worthless investment only in the tax year it becomes completely worthless. This normally happens when the corporation files for bankruptcy, stops doing business, and has no assets.
- Enter a worthless investment with a sales price of zero and the word "worthless" in its description.
- Enter the correct cost or basis, date acquired, and December 31 as the date sold.
This is entered in the investment section of TurboTax. Capital gains, losses, and 1099-B forms are all entered in the same place:
- Open or continue your return in TurboTax
- Search for investment sales and then select the Jump to link in the search results
- Answer Yes to the question Did you have investment income in 2022?
- If you land on the Your investments and savings screen, select Add investments
- On the Let's import your tax info screen, select Enter a different way.
- On the OK, let's start with one investment type screen, select Other (land, second home, personal items) 1099-S and Continue.
- Continue through the screens to enter your investment and we'll calculate the gain or loss from the sale
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