I invested in a company which went bankrupt. I understand that I can get tax breaks from the losses I incurred. How do I do this on TurboTax?

[LindaS5247]

You can take a total capital loss on the stock if you own stock that has become worthless because the company went bankrupt and was liquidated.

When you have such a capital loss, it can be taken against any Capital Gains income you may have on your return.

If there is not sufficient amount of Capital Gain, then $3,000 each year can be taken until the entire loss has been used (carryover loss).

You can enter your worthless stock as follows:

1. Click on the search icon in the upper right of your TurboTax screen
2. Type "investment sales" in the search box
3. Click the link "jump to investment sales"
4. Follow screens to enter your loss and online instructions 
5. Select short term since it is a bad debt from bankruptcy
6. On the screen that says, "Did you have investment income in 2024?" click on "Yes"
7. On the next screen select "Skip Import"
8. On the screen that says "OK, let's start with one investment type" click on the box for "Stocks, Bonds, Mutual Funds"
9. And select "Continue"
10. Follow the TurboTax prompts to enter your information and answer all follow-up questions

To search for the TurboTax entry screens to enter your worthless stock, your screens will look something like this:

For more details on how capital gains are taxed, click this link How Capital Gains are Taxed.