I have been investing in a startup (C Corp) for several years, where I made over 20 separate cash infusions, for each of which I received a stock certificate). At the end of 2019 this venture ceased operations. I received notice that since this cessation represents a "qualifying event" and my total investment can be taken as an ordinary "section 1244" loss (vs Capital loss). The venture never achieved profitability and the (unlisted) stock has no value.
How to I record this loss in Turbotax (premier edition)?
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You use the "Stocks, Mutual Funds, Bonds, Other" interview, presumably telling TurboTax you didn't get a 1099-B. You'll be dropped into a guided interview where you'll tell TurboTax the details of the sale ($0 proceeds) and the details of your purchases. On the page "Do Any Special Situations Apply to This Sale?" you'll select "Small Business Stock" then continue the interview.
Thanks for the guidance. The question however, after entering my stocks purchased, it takes me to a screen that appears (see screenshot below) that this will be treated as a "capital loss" in Turbotax.
As this cessation of venture was a qualifying event under Section 1244, I was led to believe that the entire investment loss could be considered an "ordinary (vs capital) loss. Did I miss a step somewhere ?
If you missed this page:
then I'd say you did miss something. This is a screen show from the desktop product. I assume "online" has something similar. That screen then leads to this one:
and so on.
Went back and saw where I went wrong. Got to final page and after checking the boxes shown, TT sayd this doesn't qualify as a 1244.
Scratching my head...
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