Question

Accounting for SAFEs

Forum|Forum|2 years ago
March 12, 2024
1 reply
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I invested in a venture investment via a Y Combinator post-money SAFE. The terms of the document state that the investment should be treated as stock for tax purposes. The investment was written down to 0, and I am hoping to record a loss on this investment.

Where in Turbotax would I record this? I don't have a 1099-B as this investment was not done through a bank or brokerage, yet Turbotax insists that stock gains/losses need a 1099-B. I should be able to take the loss but am unable to enter it into Turbotax, so looking for some advice on how to account for the loss properly.

Thanks.

D

DianeW777

Yes, you can enter it in TurboTax without your 1099-B. When you say the investment was written down to zero, this assumes there will never be any value or increase in the SAFEs and you have a complete loss on this investment.

Use the Search (upper right) > type 1099b > Select the Jump to ... Link (even though you did not receive a 1099-B)
Select Yes you sold investments or Add another investment
Select Stocks, Bonds, Mutual Funds > Continue > Skip Import > Continue
Complete the Broker name and Continue until you reach the screen 'Now choose how to enter your sales'
Select One by one > Continue > Enter the detail of your sale
Enter your holding period (long or short term basis not covered).
1. Long term: held more than one year (one year plus one day)
2. Short term: held one year or less