Get your taxes done using TurboTax

If the stock is worthless, you should be able to report your complete investment in the stock.

Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. 

A stock may become worthless when the corporation files for bankruptcy, stops doing business, and has no assets. Financial difficulties will not make a company's stock worthless unless there's no hope that the company will survive.  Worthless stock includes abandoned stock, permanently surrendered for no consideration.

Enter a worthless stock like any stock sale but 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. 

See IRS Publication 550 Investment Income and Expenses, page 54. 

In TurboTax Desktop, follow these steps:   

1. Across the top of the screen, click Federal Taxes.
2. Across the top of the screen, click Wages & Income.
3. Click I’ll choose what I work on.
4. Scroll down to Investment Income.
5. Click to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
6. Click Add investments.
7. On the Let Us Enter Your Bank and Brokerage Tax Documents screen, select Skip import.
8. On the OK, let's start with one investment type screen, select Stocks, Bonds, Mutual Funds, then Continue.
9. At the screen Which bank or brokerage, enter the information.  Click Continue.
10. Do these sales include any employee stock, enter No.
11. Do you have more than three sales, enter No.
12. Do these sales include any other types of investments, enter No.
13. Did you buy every investment listed, enter Yes.  Continue.
14. On the screen Now, choose how to enter your sales, select One by one.  Select Continue.
15. At the screen Look for your sales on your 1099-B, select Continue.
16. You will now be able to enter the worthless security.  Include the word worthless in the Description.  Enter $0 total proceeds (sales) and your cost basis, along with the sales category.  Date of sale will be December 31.  When finished, select Continue.
17. At the screen Let us know if any of these situations apply to this sale, select This was a worthless security.  Select Continue.
18. At the screen Review your sales, select Add another sale as necessary.
19. When completed, close the record and click Continue.