☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Feb 28, 2021 5:16:56 PM

How do I report a complete loss of preferred shares in a private company due to foreclosure?

I've invested an a number of preferred shares in a private company that went belly-up.  I have a 'worthless investment letter' from the company for proof of value.  How do I specifically report the loss and do the same rules apply for loss carryover every year as for regular public company stock loss sales?

1 1 617
1 Best answer
Expert Alumni
Feb 28, 2021 5:43:08 PM

According to Awesome Turbo Agent HelenC12, she states to "enter a worthless stock like any stock sale but with a sales price of zero and the word "worthless" in its description. Enter the correct cost or basis, date acquired, and December 31 as the date sold.

  1. Open (continue) your return in TurboTax.
  2. In the search box, search for investment sales then click the "Jump to" link in the search results.
  3. Answer Yes to the question Did you sell any investments?
    • If you land on the Here's the investment sales we have so far screen, click Add More Sales.
  4. Answer No to the 1099-B question.
  5. On the next screen, select the type of sale you had (stock, second home, collectible, land etc.) and click Continue.
  6. Continue following the onscreen instructions to enter the sale."
  7. Yes, you can only claim $3k in losses each year. The remainder is carried over. The same rules apply no matter what type of investment loss it is.

[Edited 02-28-2021|05:46 PM PST]

 

 

1 Replies
Expert Alumni
Feb 28, 2021 5:43:08 PM

According to Awesome Turbo Agent HelenC12, she states to "enter a worthless stock like any stock sale but with a sales price of zero and the word "worthless" in its description. Enter the correct cost or basis, date acquired, and December 31 as the date sold.

  1. Open (continue) your return in TurboTax.
  2. In the search box, search for investment sales then click the "Jump to" link in the search results.
  3. Answer Yes to the question Did you sell any investments?
    • If you land on the Here's the investment sales we have so far screen, click Add More Sales.
  4. Answer No to the 1099-B question.
  5. On the next screen, select the type of sale you had (stock, second home, collectible, land etc.) and click Continue.
  6. Continue following the onscreen instructions to enter the sale."
  7. Yes, you can only claim $3k in losses each year. The remainder is carried over. The same rules apply no matter what type of investment loss it is.

[Edited 02-28-2021|05:46 PM PST]