JulieS
Expert Alumni

Get your taxes done using TurboTax

The program navigation has changed since the first response was posted in 2020. Here is how to enter it in the 2021 version:

  1. Select Federal from the left side menu.
  2. Select Wages and Income toward the top left.
  3. Scroll down/ expand the list and look for Investment Income.
  4. Find Stocks, Mutual Funds, Bonds, Other and click on Start or Update to the right. 
  5. On the screen titled,  Did you get a 1099-B or brokerage statement for these sales? answer No.
  6. On the screen titled, Tell us about this sale, answer I'll enter one sale at a time. 
  7. Fill in your information about the stock. Since this is not a sale, your sale proceeds is $0, assuming you didn't recover any of your investment. Your sale date would be the date that it became clear that the stock was worthless. Holding period will be F.
  8. Click Continue.
  9. On the next screen, leave everything blank and click Continue.
  10. On the question, Select any less common adjustments that apply, check the third one.
  11. Click Continue.
  12. On the next screen, What kind of Small Business Stock?, Select the second from the bottom, Qualified small business stock eligible for ordinary loss deduction (Section 1244).
  13. Click Continue.
  14. On the next screen select all that apply and click Continue.

See the screen below as to the choices that must be selected to qualify for the ordinary loss treatment. All of these four conditions must be true to qualify for 1244 treatment.

 

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