It depends. If you have a document that clearly states your stock shares are worthless, then you can deduct your capital loss.
You can report them in the year they are deemed to be completely worthless. This usually happens when a company stops doing business or files bankruptcy. You should be prepared with your proof and retain it in your tax file.
The sales price would be zero and the cost basis would by what you actually paid for the stock. You should use the description as 'Worthless ABC 5Sh' (example).
To enter worthless stock as investment sales:
- Open (continue) your return in TurboTax.
- In the search box, search for investment sales then click the "Jump to" link in the search results.
- Answer Yes to the question Did you sell any investments?
- If you land on the Here's the investment sales we have so far screen, click Add More Sales.
- Answer No to the 1099-B question.
- On the next screen, select the type of sale you had (stock, second home, collectible, land etc.) and click Continue.
- Continue following the onscreen instructions to enter the sale.
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