I agree with @Anonymous in that you should seek a tax professional to assist in this matter where you can have a one on one discussion.
Having said that, there are a number of issues that need to be addressed:
- As a member in an LLC, which I am assuming was taxed as a partnership, you should have been receiving a K-1 each year; 2007 through ?
- As a member in an LLC, you should have been maintaining your tax basis in this investment. This begins with your initial capital contribution and is adjusted each year for the applicable items on your K-1. Unless you know your tax basis, you cannot determine your overall gain or loss.
- Did you receive a 2016 K-1?
- Was your 2016 K-1 marked final?
- What has transpired from 2016 until now? Declaring bankruptcy does not always translate into an immediate loss. What is key is if and when you received a final K-1 for this LLC and / or based on your facts you can support a loss. You may not have received any final K-1 if the LLC did not have funds to pay someone to prepare the tax return.
- You need to claim the loss in the year the loss was incurred. You don't have any choice in this. What you need to determine, is when did you have a loss. If it was truly in 2016, based on your facts (which we don't know all of the facts), you may not be able to amend your 2016 tax return. This would be a significant issue for you.
- As you can see, there are many issues in which you need to obtain assistance from a tax professional.
*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.
