I invested $100,000 in a small business in 2000. Last week I sold it for $100.
Do I just list it on the Schedule D and provide documentation if the IRS wants it, or do I include documentation with the tax return?
Did you get stock when invested the 100k? If yes, then it's typically reported like any other stock on Schedule D. If you received section
1244 stock, then report the loss on form 4797 instead, and you can deduct 50k if single and 100k if married, and the remainder is a capital loss. I'm not sure if it allows you take an NOL.If this was an LLC, then your 100k investment increases your cost basis in the LLC by 100k, and so the tax handling of your disposition of your LLC interest is the same as a stock.
This might also be considered a non business bad debt. So you report it as a short term capital loss, per
Yes, I got stock. So I just report it like any other stock transaction? Okay, thanks.
And you can offset gains by this amount or up to $3000 of ordinary income each year until it's used up.
Okay, thanks.
Since the investment was in a small business, there's a much larger offset available the first year. See earlier in the thread.
Seth
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