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