Golf course bankruptcy

[garym3]

I joined a golf club in the 2000's and paid an initiation fee. The club went bankrupt in 2014, and I lost my initiation fee. I recently learned that several members of the club deducted their loss on their tax return in 2014 or 2015.

Question: Can I still take that loss now? I know I can only amend back 3 years, so I can't go to 2014. But could I amend 2017? 2018?

Where would I take the loss? Capital gains and Losses?

Thanks!!

[Opus 17]

If you had an “equity membership”, it might have been a schedule D deductible loss, but only in the year the investment attained zero value.

Now, if your loss was more than $9000, and you had no other capital gains to offset the losses in 2014, 2015, or 2016, then you might have a deduction remaining today.  Capital losses are only deductible up to the amount of your capital gains plus $3000. Let’s say you invested $10,000, and you reported no other capital gains in 2014, 2015, or 2016. Then, you would have deducted $3000 in 2014 and carry forward the loss to 2015, when you deduct $3000 and carry forward to 2016, when you deduct $3000 and carry forward 2017, when you could deduct the final $1000.

you can file an amended return for 2017 and still get a refund paid to you if the amended return calls for it. In the case of my example, you would have to file amended returns for 2014, 2015, 2016, and 2017, in order to claim the carryover into 2017. TurboTax it’s not supported the past three years, so you would have to find another way of preparing all of those amended returns.  If your equity was more than $9000, you might have a further loss to deduct in 2017. If you were equity was less than $9000, or if you had offsetting gains, then there might be nothing to carry forward to 2017. You will have to do your own math.

And all of this assumes that you had an equity membership, rather than a non-equity membership, and it assumes that an equity membership is a deductible loss if the club goes bankrupt, which I have never heard of before and would have to send you to a tax advisor to make sure it was actually legal.  

[garym3]

Thanks! Several other guys did take the deduction and it worked for them.  Some more facts to get your perspective. The initial cost was $60,000. I can cover all of this in 2014. But can I amend a 2014 tax return now? Or has my time expired?

I can also cover this in 2017. But do I have to start at 2014? 

Thanks again for your help

[VictoriaD75]

You may be able to amend your 2014 with the help of a tax professional, but your time has expired to claim any additional refund. You must begin the claim of the loss in the year in which it occurred, 2014. You cannot take all $60,000 in 2017. You must also be able to report the the IRS these losses. You cannot have it appear in a later tax year without prior year support. You may need to seek the assistance of a local tax professional. As already mentioned, this depends on the type of membership. The loss may not be deductible at all.

You would need to revise your tax returns beginning in 2014. The loss would first be allocated to offsetting any capital gains included reported in each year. Then, as stated above, you can only take $3,000 per year against other income. You would need to calculate each year to determine how much loss remained in 2017 and carries forward to tax years 2018 & 2019.