I invested $12,000 in a restaurant startup and it failed and lost the entire investment. Can I claim this and if so where?

[DavidD66]

Yes, you can claim the $12,000 you lost on your restaurant investment. You will report the sale in the same section in which you report stock and other investment sales.  To Enter in TurboTax: 

• Type "Investment sales" in the search window and click Enter
• Click on "Jump to Investment sales"
• On the page with "Did you have investment sales in 2023?"  Answer Yes
• Answer No to "Did you cave crypto income or losses in 2023?" 
• Skip the import sections and click on Enter another way
• On the screen with OK, let's start with one investment type, click on "Other"
• Answer No to "Did you get a 1099-B..."
• Enter the name of the person or entity that brokered the sale (you can leave this blank)
• On the "Now enter one sale for [description]" Indicate "Other" and give a description like "Restaurant Start-up".
• The interview will walk you through entering the details of the sale

I would enter the same value for proceeds and fair market value.  

[KatyHorn]

Thank you!  One clarification.  I was not the owner of the restaurant.  I gave the $$ to the owner and he was supposed to pay a certain share of the monthly profits, but we never got anything and then the restaurant defaulted.  Does your guidance still apply under this scenario?

[Vanessa A]

Yes, it would still be the same.  It would be similar to purchasing stock that became worthless.