I invested 40K (purchased membership units) in an LLC in 2007 which declared bankruptcy in 2016. Over the life of the business I did not receive any disbursements nor did I have any active role in the management of the business.
In researching this it seems the investment would be accounted for similar to a stock purchase that ended up worthless. It would be shown as an investment sale for $0 minus the initial investment resulting in a capital loss. The deduction would then be $3,000 in 2016 (no other capital gains) with the rest spread out over subsequent years. Am I missing anything or misunderstanding the situation? Please advise if so as I would prefer to take the loss over a few years as opposed to spread out over 10+ years. Thanks!
