If a company you owned stock in went bankrupt and you did not receive a 1099-B,. First try to contact the Broker if he can to see they can provide you a 1099-B or supporting documentation about the closure. However, .you can still claim the capital loss without a 1099-B by manually reporting it in TurboTax.
Here are the steps to:
Reporting Capital Loss for Worthless Stocks in TurboTax:
- Open TurboTax and navigate to your tax return.
- Enter information on 1099-B screen even if you didn't receive one
- In the magnifying glass at the top right team Search for investment sales and then select the Jump to link.
- Follow the onscreen instructions. When you reach Let's import your tax info, choose how you want to enter your 1099-B:
- select Enter a different way, then select your investment type on the next screen (1099-B, Stocks, bonds, Mutual Funds)
- Add a sale (even though didn't sell it)
- Answer the questions then-
- Enter the details of your worthless stock:
- Description: Enter the name of the stock and include "worthless" in the description.
- Date Acquired: Enter the date you originally purchased the stock.
- Date Sold: Enter December 31 of the year the stock became worthless.
- Sales Proceeds: Enter $0.
- Cost Basis: Enter the amount you originally paid for the stock.
- Review your entries to help ensure accuracy.
- Complete the rest of your tax return as prompted by TurboTax.
- TurboTax will calculate the capital loss.
Additional Information:
- Documentation: Keep any documentation you have regarding the bankruptcy and the stock becoming worthless, such as brokerage statements or communications from the company.
- IRS Guidelines: According to the IRS, you can only deduct worthless stock in the year it becomes completely worthless
If you need more detailed information, you can refer to the IRS guidelines on worthless stock deduction here and a comprehensive guide on claiming a tax deduction for worthless stocks here
[Edited 03/12/2025|9:42 pm, EST] @martiniworld
