K1 has never been received and now shows up!

Forum|Forum|3 years ago
March 22, 2023
1 reply
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I had a $25,000 investment in a company that stopped operations in 2018, I have NEVER received a K1. I started to take the $3,000 loss on my taxes with my 2018 taxes and have taken that each year. This week, out of nowhere I've received a K1 that indicates that my loss is around $21,000 but I've been taking the $3,000 loss annually now for 5 years. What do I do? How do I rectify the problem with now receiving a K1 after not receiving one for 5 years? Do I just continue to take the $3,000 loss until that is exhausted? Any responses are appreciated.

JamesG1

It sounds like you reported a worthless investment on IRS form 8949 / Schedule D Capital Gains and Losses as outlined in IRS Publication 544 (page 34).

You have reported or will report 2018 through 2022. Five years X $3,000 loss = $15,000 loss reported to date.

Did you receive a K-1 (1065) or something else? Was the K-1 for tax year 2018, 2022 or some other year? Please advise.

@PutzRU

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PutzRUAuthor

I had a failed investment of $25,000 for which I was told I would receive a K1 that never came until now. From what I'm hearing from other investors, they believe that this final K1 was sent as a requirement by the accounting firm handling the accounting for the failed company. Most of the other investors have already been claiming their loss for five years. I'm tempted to just ignore it.

ThomasM125

Since the K-1 form reports a loss, the IRS will not be concerned about it so it would likely be OK to leave it off your tax return. You are entitled to the capital loss whether you reported the K-1 form or not, so you are OK having deducted the maximum loss amount of $3,000 per year. You can deduct the full amount of your investment of $25,000 if that is what you lost on the venture.

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