Declaring a stock worthless

Depends.  Worthless securities have a market value of zero. Does the stock you mentioned still have a market value on any exchange?  If stock is deemed worthless, the loss is deductible as of the last day of the corporation’s tax year.  Whether stock was worthless is a facts-and-circumstances inquiry and that most courts look at both the liquidating value and the potential value in making the determination. If there is no liquidating value, the stock could still have potential value and will not be considered worthless if there is a reasonable hope that the company’s assets will exceed its liabilities in the future. Reasonable hope is one that a reasonable investor, not an “incorrigible optimist,” would have. Merely wishing or hoping that the company will do well in the future is not enough. In most instances, it is better to take a loss in the earliest year possible, when the taxpayer can file a protective claim for refund. 

Another option a taxpayer may have is to sell the stock, even for a nominal amount, in an arm’s-length transaction. However, this could result in a reduction of the overall loss. Regardless, this option will bypass the worthless security provisions of Sec. 165(g)

In TurboTax, you record the worthless stock as a stock sale with zero sale price with the total loss would be your basis in the stock.  Whether long-term or short-term loss will depend on the holding period of the the stock.  You would be able to deduct up to $3000 of net capital losses per year until the loss is used up.