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cjmpayne
Returning Member

K1

I invested in a Scorp in 2008, right after we had the economic crisis and the business all but failed.  The company fails to provide updates regarding its current operating status and unreliability provides a K1 form for tax filing. The company is essentially unreachable when we try to contact them.  All K1's have indicated a small loss for each year.  

How can i claim a total loss on the investment or write it off?  

2 Replies
KarenM90
Level 11

K1

No, unfortunately not.

 

You can deduct worthless investment in the tax year it becomes completely worthless. This normally happens when the corporation files for bankruptcy, stops doing business, and has no assets. Losses don't necessarily make this investment worthless.  

 

I would recommend contacting the company and/or an attorney and ask about relinquishing your investment.

 

If that occurs, you could claim the investment worthless in the year in which it occurs.

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cjmpayne
Returning Member

K1

Thanks!  I guess our next step is to get a lawyer.  We just want out of it, with the companies lack of response and continued delay in sending the K1s.  

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