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Bro Das
Returning Member

I have a 1300000 shares of stock that cost $69000 but have no value, how do I deduct this cost on my taxes

 
3 Replies
ColeenD3
Expert Alumni

I have a 1300000 shares of stock that cost $69000 but have no value, how do I deduct this cost on my taxes

You do not include stock on your return until it is sold. You have an unrealized loss. The stock could regain value.

 

However, if the stock is totally worthless without any hope of regaining value, then you report it on Schedule D. Enter it as worthless stock.

 

You can deduct worthless stock only in the tax year it becomes completely worthless. This normally happens when the corporation files for bankruptcy, stops doing business, and has no assets. Financial difficulties won't make a company's stock worthless unless there is no hope that the company will pull through.

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.

To enter worthless stock as investment sales:

  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 (second home, collectible, land etc.) and click Continue.
  6. Continue following the onscreen instructions to enter the sale.
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Bro Das
Returning Member

I have a 1300000 shares of stock that cost $69000 but have no value, how do I deduct this cost on my taxes

I tried to enter this stock, in form D, but it would not allow me to enter 1300000shares. not anything above 100000.

so what do I do? I have the subscriptions and amount of the purchases. 

DianeC958
Expert Alumni

I have a 1300000 shares of stock that cost $69000 but have no value, how do I deduct this cost on my taxes

You can leave off the amount of stock you purchased and report the transaction so you receive the deduction for the amount you paid.

 

If you owned the stock for more than 1 year, the loss will be a Capital Loss.  You can only deduct a maximum of $3,000 per year above any Capital Gains, that are offset by the loss.  The balance of your loss will be carried forward.

 

Guide to Schedule D: Capital Gains and Losses

 

@Bro Das

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