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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:
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.
The worthless stock was in an IRA rollover account..
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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