topic Investment in Private Company (A Restaurant) - Losses, deductions, tax benefits etc in Deductions & credits

Investment in Private Company (A Restaurant) - Losses, deductions, tax benefits etc

JonoJohnson — Fri, 03 Apr 2020 20:09:23 GMT

Hi,

I am an investor in a restaurant and with this quarantine situation I was thinking there is a chance that the restaurant does not survive an extended lockdown. This is my only K-1, I have no other passive income (or loss). Lets say I invested $50,000 back in 2015 - if the restaurant fails in calendar year 2020 and the value goes to $0...

1) How do I report that loss on my taxes?

2) Do I get a tax benefit somewhere for the $50,000 loss?

*I know my capital account is a bit less than 50,000 after some passive losses over the years but is still roughly $50,000*

Thank you!

Re: Investment in Private Company (A Restaurant) - Losses, deductions, tax benefits etc

AmeliesUncle — Sat, 04 Apr 2020 01:27:12 GMT

When you enter the "Final" K-1, the program will walk you through it.

It is a capital loss. Similar to if you bought stock for $50,000 and sold it for $0. You would show a $50,000 capital loss.

Re: Investment in Private Company (A Restaurant) - Losses, deductions, tax benefits etc

JohnB5677 — Sun, 05 Apr 2020 21:14:35 GMT

AmeliesUncle stated that correctly. This will not be reported until next year. Hopefully with the assistance that's available you will be able to survive.