ESPP Liquidated

[Ajogni15]

Hi, I'm wondering how to calculate my losses for employee stock units I had that are now worthless due to all stock being liquidated  during bankruptcy. I received a form from Morgan Stanley that showed the quantity of shares liquidated and what the Purchase Date FMV was when I bought the shares but I think I should be calculating losses off of the Purchase Price (price I bought the shares at). Can someone help advise how to handle?

[MaryK4]

You will enter in TurboTax as Worthless Stock. 

 To enter worthless stock go to investment sales:

Under Federal Wages& Income, select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) under Investments and Savings.

1. Did you have investment income in 2024? YES
2. Let's import your tax info  Enter a different way
3. OK, let's start with one investment type Other Continue
4. Tell us more about this sale  Worthless Stock Continue
5. Now, enter one sale for WORTHLESS STOCK (Proceeds=0 Date sold or disposed= 12/31/2024)
6. Let us know if any of these situations apply to this sale  This was a worthless security  Continue

Unfortunately, your losses may be limited to $3000 for the year (if they are long term capital losses), but you will be able to carryforward any excess loss and deduct in future years.