Level 7

Business & farm

If you didn't receive any stock/shares, it would be a non-business bad debt.  Deductible as a short-term capital loss.

If you received stock/shares, then it would be a capital loss, long-term or short-term depending on long you held the shares/stock.

You could have had shares, and not be in a public company.  Privately held stock/shares are sold all the time.

Did you ever receive a Sch K-1 from the LLC?  If so, was it a Sch K-1 from a 1065?   That would indicate it was a partnership interest you held.

If it was a Sch K-1 from an 1120S, that would indicate it was treated as a Sub Chapter S corporation.

In any event, it would appear that it would treated as a capital loss....the question being short-term or long-term?

See this link



**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**

View solution in original post