Taxes for selling Celsius Network Claim

[Lee7007]

I had funds that I lost when Celsius Network declared bankruptcy. Earlier last year, I sold my claim at a fraction of their value.

How do I report this on my taxes for this year?

[JamesG1 · Accepted solution]

If I understand you correctly, you have sold your stake in the investment.  The sale reported on IRS form 1099-B will report the loss that you sustained.

In TurboTax Online, follow these steps:

• Click on Federal down the left side of the screen.
• Click on Wages & Income down the left side of the screen.
• Scroll down to Investments and Savings and click the down arrow to the right.
• Click Start / Revisit to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.
• Click Add investments.

If you retain an investment which becomes 100% worthless, it may qualify for treatment as a nonbusiness bad debt.  See here.

There must be no chance that the borrower can or will ever pay you back the amount of the loan. It is important to make a documented effort to collect your money with:

• Letters
• Invoices
• Phone calls

If the borrower files for bankruptcy, this is clear evidence you cannot be repaid.