I was in an employee stock purchase plan. The company went bankrupt and the stocks were extinguished in 2017. How do I use Turbo to enter the data?

[cbarras]

I was in an ESPP. The company went bankrupt and the shares were extinguished in 2017. How do I use Turbo to enter the data?

[ToddL · Accepted solution]

In order to claim the loss on your tax return, you'll need to enter it as a "sale of stock for $0" in the "Stocks, Mutual Funds, Bonds, Other" interview. 

(This interview is not available in the TurboTax Free Edition, so you'd need to upgrade to the Premier version to report the loss).

When you start the interview you'll be asked if you received a 1099-B, or not.  

Depending on your answer you'll be led to slightly different interviews, but both interviews ask for the exact same information:

1. A description of what was "sold" (same as "extinguished".
2. Date of "sale" (when the shares became worthless).
3. Proceeds of "sale" ($0).
4. Basis (what you paid for the shares).
5. Date of acquisition (when you paid for the shares). Group your purchases; those purchased more than a year before the stock was "sold" and those purchased less than a year before the stock was "sold". This may require two entries.