If I understand you correctly, you have sold your stake in the investment. The sale reported on IRS form 1099-B will report the loss that you sustained.
In TurboTax Online, follow these steps:
- Click on Federal down the left side of the screen.
- Click on Wages & Income down the left side of the screen.
- Scroll down to Investments and Savings and click the down arrow to the right.
- Click Start / Revisit to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.
- Click Add investments.
If you retain an investment which becomes 100% worthless, it may qualify for treatment as a nonbusiness bad debt. See here.
There must be no chance that the borrower can or will ever pay you back the amount of the loan. It is important to make a documented effort to collect your money with:
- Letters
- Invoices
- Phone calls
If the borrower files for bankruptcy, this is clear evidence you cannot be repaid.
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