How to file loss on start up investment

Forum|Forum|1 year ago
March 4, 2025
1 reply
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I invested $150,000 in a Series-3 Preferred start up company. The company folded after 15 months. I lost all my money, but received no form for loss. How do I write this off?

MAK70

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:

Under Federal Wages& Income, select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) under Investments and Savings.

Did you have investment income in 2024? YES
Let's import your tax info Enter a different way
OK, let's start with one investment type Other Continue
Tell us more about this sale Worthless Stock Continue
Now, enter one sale for WORTHLESS STOCK (Proceeds=0 Date sold or disposed= 12/31/2024)
Let us know if any of these situations apply to this sale This was a worthless security Continue

You may want to see if it qualifies as 1244 small business stock- this will allow more of your loss to be claimed against your other income, BUT IF YOU ARE NOT 100% SURE, DO NOT CLAIM IT AS SUCH.