How do I report a cancellation of a common stock that I purchased? It's not a sale.

[JohnP406]

I exercised my vested stock options into common stock when I left my old company, but then the company was acquired in such a way that common stock was all dissolved. I lost it all. :-((

Can I report that as a loss in my investments in TT, and if so, how? Do I report it as a sale of $0?

[TomYoung · Accepted solution]

"Can I report that as a loss in my investments in TT, and if so, how? Do I report it as a sale of $0?"

Essentially that's correct. 

Using the "Stocks, Bonds, Mutual Funds, Other" interview, tell TurboTax that you have a sale NOT reported on a 1099-B.  Assuming you know the correct basis to use - which almost certainly isn't simply what you paid for it - simply tell TurboTax that what you sold was "stock".  Enter the basic information about the sale, with a proceeds of $0 and a date sold of 12/31/18.  You can tell TurboTax you bought the stock, (you really did using a combination of cash and "sweat equity"), with a purchase date the same as the exercise date, then enter the basis information.  On the "Special Situations" page tick "worthless".

Tom Young

[disergio]

I have the similar situation. For me, there were two losses. First the amount I paid to exercise vested stock options. Second I paid AMT on bargain element when filing taxes next year. How to report both losses?