Follow these steps to enter the form 1099-B in TurboTax:
My problem is that it shows no cost basis. I'm also not exactly sure what it's for. It is a settlement from a Bankrupcy from a company that closed up over 25 years ago. No matter what I do it always comes back on Turbo Tax that it needs attention. All this for $ 1.64.
Thanks for your help and consideration.
Dave
I also received a 1099-B Proceeds From Broker and Barter Exchange Transactions. This was the final amount that I was to receive from this investment. Do I need to do a Schedule D? How do I handle an investment that went bankrupt?
Q. Do I need to do a Schedule D?
A. Yes. Failure to file a schedule D will result in getting a letter from the IRS demanding tax on the entire Proceeds amount. If the amount is small, e.g. $1.64, you would probably be safe ignoring it. But you don't want to, see next question/answer.
Q. How do I handle an investment that went bankrupt?
A. You report the proceeds of the sale (report $0 if there was no form 1099-B or actual $). You report your cost basis and claim a capital loss on your Schedule D. You may deduct up to $3000 against other income. Any amount over $3000 is carried forward to next year, where you will deduct another $3000 and carry forward any remaining excess. The entire loss can be deducted against capital gains (and qualified dividends), but you are limited to $3000/year against ordinary income.
Q. What if I Don't know my cost basis?
A. You have to report the sale on your tax return. Lacking any cost basis, the IRS will consider the entire sale amount as taxable. So, you need to make your best effort to determine the original cost basis, even if (worst case) it's a guess. Historical prices of publicly traded stocks are readily available on the internet and should, at least, satisfy the IRS that your basis wasn't zero; just "google" “Historical Stock Prices". I use http://bigcharts.marketwatch.com/historical/. The stockholder relations dept. at the company may be able to help.