how to write-off a worthless ETF in tax return filing?

[E]

Seeking expert's input... I had some VanEck Russia ETF (RSX). It became "un-tradeable". Can I write-it-off in tax return filing since it's considered worthless? How can I go about doing it in TuboTax 2023 program? Thanks in advance for your inputs.

[LindaS5247]

Please clarify your question by adding some additional information so we can provide a more helpful answer.   It appears that this may be a liquidating distribution.  Please see this link, click here, regarding VanEck Russia ETF (RSX). Have you received a Form 1099-DIV with respect to this stock?

Please feel free to come back to TurboTax Community with additional information or questions or click here for help in contacting Turbo Tax Support. 

[Edited 03/19/24|11:47 AM PST] @E 

[E]

Thank you for your help in this regard!

[E]

I did receive the consolidated1099-DIV from my brokerage firm. However, there is no entry (no information) regarding RSX.

[RobertB4444]

If you didn't receive a 1099 regarding this stock then you need to make an entry for the stock sale onto your return as though you had received a 1099-B.

You'll enter the name of the investment and then a purchase date of when you bought the stock and a purchase amount of the full initial investment.

Then you'll enter a sale date of when the investment became worthless and a sale price of zero dollars.  Make certain that you are not entering this sale if there is any chance of a partial recovery in the future.  The sale is entered when you are certain it is worthless.

Save the documents showing your initial investment and the documents proving that the investment has become worthless.  If there are any questions about this in the future you will need to be able to prove it.

@E 

[nkan12]

Thanks for your response. 

I bought 100 RSX for around $1600.  While liquidation RSX had a final payout of around $70 that is reported in box 3 of 1099-  Turbotax has already included this amount reported in box-3 in its calculations when I downloaded the 1099-DIV from broker. Now, when I report the transaction for my loss in the ETF my cost is $1600. My sale price is $0 or $70? I assume it is $0 since the $70 is accounted as dividend separately. Am I correct?

[52387sbw]

I'm pretty sure you cannot write off RSX yet because the fund hasn't  been terminated and you may continue to make payments.  The person who replied to you before said that you can't write it off until you are 100% sure it is worthless; that doesn't seem to be the case here, as RSX still holds shares in companies, and you may still continue to receive additional distributions.

Also, here's info from google on box 3 in you 1099-Div:  (it) Shows a return of capital. To the extent of your cost (or other basis) in the stock, the distribution reduces your basis and is not taxable. Any amount received in excess of your basis is taxable to you as capital gain. 

You aren't getting taxed on anything you see in box 3.  If you decide to write it off, you should reduce the basis by the $70, but I don't think you can write it off yet. I'm trying to figure out the same thing myself, and this is my best assessment, but I'm not positive.  

[nkan12]

Thanks. 1099-B said liquidation distribution for RSX. So I got mislead. Looks like the liquidation is not completed yet.