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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:
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.
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
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