To expand on the initial response:
- Form 7203 is a new form for 2021
- Prior to the form 7203, each shareholder was responsible for maintaining their own basis in the stock in what ever format they chose.
- If you were taking a loss, then each shareholder was required to attach the basis schedule to their 1040.
- Form 7203 is now required, in almost all cases, to be included with the return as a replacement to attaching each taxpayer's own version of their basis.
- So for you, the key is now taking your 2020 end of the year stock basis and put this on line 1 of form 7203. I am not sure if form 7203 pulls in all the appropriate items for 2021 activity. If not, then you need to complete the other lines for 2021 activity to reflect your end of the year basis. This needs to be positive in order to take your loss.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
