Where in tax return to write off a bad investment in a company start-up whose stock has no value as company out of business?? How to enter details for loss carryforward?

[flashmason]

I have full documentation. Recently confirmed company no longer in business.

[PatriciaV · Accepted solution]

Yes, you may report this as an investment loss.

Enter this under the Investment Income area of Personal Income.

1. Choose Personal >> Personal Income, then I’ll Choose What I Work On.
2. Investment Income >> Stocks, Mutual Funds >> Start/Update.
3. Type of Investment: Everything Else
4. Enter a description, Net Proceeds = $0, and date of sale = date of dissolution.
5. Acquired: Whatever method
6. Cost Basis: your investment
7. Date of Acquisition: date you made your investment

TurboTax will calculate the loss on this investment and determine if it was short- or long-term. If you have other capital gains, the loss will offset some or all of the gains. Otherwise, up to $3,000 of the capital loss will go to line 13 of Form 1040 and offset other income. The remaining loss over $3,000 will be carried forward each year until used up (applied to capital gains and/or ordinary income).