I loaned about $1,000,000 to a friend over a period of about 8 years. I was given stock as a partial payback of the loan. Stock was worth about $100,000. Stock increased in value to $2,000,000 over a period of many years when I sold some of it. Can I deduct the loan amount from the increase in value? Or do I have to treat the loan as a gift and if so, how do I figure the cost basis of a gift? My friend was working for a start up company and was paid in stock rather than money. I guess you could say I partially supported him for many years. I had expectations of being paid back.
