Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Feb 14, 2024 4:49:47 PM

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

0 3 960
3 Replies
Expert Alumni
Feb 14, 2024 5:17:29 PM

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.  

Level 1
Feb 14, 2024 5:21:58 PM

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?

Expert Alumni
Feb 14, 2024 5:30:56 PM

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