Worthless Stock

No, you can't deduct the full amount of your worthless stock. Net losses are deductible, but only up to a maximum of $3,000 ($1,500 if married filing separately). 

• Any capital losses you couldn't deduct this year can be carried forward and deducted on future tax returns. This is called a capital loss carryover.

You can deduct worthless stock or a worthless investment only in the tax year it becomes completely worthless. This normally happens when the corporation files for bankruptcy, stops doing business, and has no assets.

1. Enter a worthless investment with a sales price of zero and the word "worthless" in its description. 
2. Enter the correct cost or basis, date acquired, and December 31 as the date sold.

This is entered in the investment section of TurboTax. Capital gains, losses, and 1099-B forms are all entered in the same place:

1. Open or continue your return in TurboTax
2. Search for investment sales and then select the Jump to link in the search results
3. Answer Yes to the question Did you have investment income in 2022?
   • If you land on the Your investments and savings screen, select Add investments
4. Follow the instructions and we'll calculate the gain or loss from the sale

Related Information:

• How is a capital gain or loss calculated?
• Where do I enter a capital gain or loss?
• What is a capital loss carryover?
• How do I enter my capital loss carryover?
• What is a capital asset?

you report your full loss but the amount deductible if you have no gains is $3000. any unused loss carried over to 2023 and again it offsets capital gains with any remaining excess loss deductible up to $3000