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I did not receive a 1099b form for a worthless stock

can I enter the information I have
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4 Replies
JamesG1
Employee Tax Expert

I did not receive a 1099b form for a worthless stock

You may.  If the stock is worthless, you should be able to report your complete investment in the stock.

 

Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. 

 

A stock may become worthless when the corporation files for bankruptcy, stops doing business, and has no assets. Financial difficulties will not make a company's stock worthless unless there's no hope that the company will survive.  Worthless stock includes abandoned stock, permanently surrendered for no consideration.

 

Enter a worthless stock like any stock sale but with a sales price of zero and the word worthless in its description. Enter the correct cost or basis, date acquired, and December 31 as the date sold. 

 

See IRS Publication 550 Investment Income and Expenses, page 54. 

 

In TurboTax Online, follow these steps:

    

  1. Down the left side of the screen, click Federal.
  2. Down the left side of the screen, click Wages & Income.
  3. Click the down arrow to the right of Investments and Savings.
  4. Click to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
  5. Click Add investments.
  6. On the Save time and connect your financial accounts screen, select Enter a different way.
  7. On the How do you want to add your docs? screen, select Type it in myself.
  8. On the OK, let's start with one investment type screen, select Stocks, Bonds, Mutual Funds, then Continue.
  9. At the screen Which bank or brokerage, enter the information.  Click Continue.
  10. Do these sales include any employee stock, enter No.
  11. Do you have more than three sales, enter No.
  12. Do these sales include any other types of investments, enter No.
  13. Did you buy every investment listed, enter YesContinue.
  14. On the screen Now, choose how to enter your sales, select One by one.  Select Continue.
  15. At the screen Look for your sales on your 1099-B, select Continue.
  16. You will now be able to enter $0 total proceeds (sales) and your cost basis, along with the sales category.  When finished, select Continue.
  17. At the screen Let us know if any of these situations apply to this sale, select This was a worthless security.  Select Continue.
  18. At the screen Review your sales, select Add another sale as necessary.
  19. When completed, close the record and click Continue.
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I did not receive a 1099b form for a worthless stock

Doubtful that you will receive a 1099-B.

You are determining that the value of the stock is worthless based on the current facts.

As such, you need to retain or obtain documents that support you taking a worthless stock deduction.  You will have the burden of proof if audited.

 

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

I did not receive a 1099b form for a worthless stock

The worthless stock was in an IRA rollover account.. 

DavidD66
Employee Tax Expert

I did not receive a 1099b form for a worthless stock

You cannot deduct a loss for a worthless stock in an IRA.  Unlike a taxable brokerage account, you cannot claim a capital loss for worthless securities inside an IRA.

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