If someone owes you money that you can't collect, you may have a bad debt. For a discussion of what constitutes a valid debt, refer to Publication 550, Investment Income and Expenses and Publication 535, Business Expenses. Generally, to deduct a bad debt, you must have previously included the amount in your income or loaned out your cash. For a bad debt, you must show that at the time of the transaction you intended to make a loan and not a gift.
See this TurboTax article for information on reporting a nonbusiness bad debt loss.
In order to deduct a loss on an equity investment, instead of a bad debt, you would need to be able to establish the ownership, the cost of the share, and that it is worthless.
See this thread for a discussion of a similar topic.
See IRS Topic 453 for more information.
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