I exercised options I was granted at startup. The startup closed in 2020. Can I claim this as capital loss for amount paid to exercise? How do I enter on turbotax?

[shobhit_turbo]

I have the form 3921 I submitted to IRS at the time of exercising. Should that be uploaded somewhere on turbotax?

[DianeW777]

If you are stating that you exercised stock options that are now worthless you can report them in the year they are deemed to be completely worthless. This usually happens when a company stops doing business or file bankruptcy.  You should be prepared with your proof and retain it in your tax file.

The sales price would be zero and the cost basis would by what you actually paid for the stock.  You should use the description as 'Worthless'.

To enter worthless stock as investment sales:

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then click the "Jump to" link in the search results.
3. Answer Yes to the question Did you sell any investments?
   • If you land on the Here's the investment sales we have so far screen, click Add More Sales.
4. Answer No to the 1099-B question.
5. On the next screen, select the type of sale you had (stock, second home, collectible, land etc.) and click Continue.
6. Continue following the onscreen instructions to enter the sale.

Helpful Information:

• How do I deduct worthless stock?
• IRS FAQ -Worthless Security