I found out a stock I owned went bankrupt in December of 2023. The loss does not appear on any of my 1099 forms for this year or last year. How do I claim the loss?

[SabrinaD2]

To claim a loss for a stock that went bankrupt in December 2023, even if it doesn't appear on your 1099 forms, you can follow these steps:

1. Open or continue your return. Please be sure you are signed in for step 2 link to work.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales.
   • TurboTax Desktop: Search for investment sales and then select the Jump to link.
3. Answer Yes to the question Did you have investment income in 2024?
   1. If you land on the Your investments and savings screen, select Add investments.
   2.  Enter your investment manually, select Enter a different way, then select your investment type (stock)  on the next screen.
   3. Enter the information requested using your statements and purchase information 
      1. The sales prices would be 0 if you received nothing from the sale of worthless stock
      2. Sales date is likely December 31 - IRS rule for worthless securities
4. Follow the instructions and TurboTax calculates the loss from the sale of bankrupt stock.

You can deduct a net loss of up to $3,000 ($1,500 if Married Filing Separately). Any capital loss you couldn't deduct this year can be carried forward and deducted on future tax returns as a capital loss carryover.

[mateojh]

Does it matter that it became worthless on 12/7/2023, rather than during 2024? Should I amend the 2023 returns to claim it, or is it fine to include it in 2024?

[AnnetteB6]

It should be reported on your 2023 tax return since that is the year it became worthless.  When you enter the stock sale into your return, the sale date should be 12/31/2023.  Also, include the word 'worthless' as part of the description field for the item sold.

@mateojh