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t1_jefh2xu wrote

Did you realize the loss?

Did you get a 1099-b?

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OP t1_jefhhvp wrote

I didn't get any 1099-b. Only thing I heard was a note saying "As such, no proceeds will be available for any holders of preferred stock or common stock."

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Is there a 1099-b issued for startup equity as well?

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t1_jefm76x wrote

Looks like someone point you in the right direction on how to report the lost.

As a side note, you can report a max of $3k total loss per year. However, if you have capital gains, your carryover capital loss is used against that.

Concrete example:

Tax year 2022, You take the $20k loss. You had no capital gains. You'll have a $3k capital loss with a $17k carryover capital loss.

Let's say in tax year 2023, you have $5k capital gains from sell stocks. So, you'll use $5k of your carryover for that and then you'll use another $3k as a capital loss. On your taxes, you'll have a -$3k capital gains and a ($17k-$5k-$3k) $9k carryover loss.

Let's say in tax year 2024, you don't have any capital gains so you take a $3k capital loss using the carryover loss. Now your carryover is $6k.

Let's say in tax year 2025, you have $10k capital gains from selling stock. You will use all of your carryover capital loss and report a capital gain of $4k.

Your tax software will do this automatically for you. I've had a large capital loss carryover and the next year I realized a bunch a capital gains to wipe out my carryover. I look at that carryover as giving free money to the IRS that I want back ASAP.

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OP t1_jefrmk4 wrote

Thats great to know! Hopefully my software remembers and takes care of all this for me, because I sure won't remember :-)

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t1_jefq4qc wrote

Did you report it in 2018?

If you claim a 20k stock loss without a 1099-B you will get audited. So just make sure you have all your documentation.

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OP t1_jefqhnr wrote

I didn't report anything back in 2018, just cut the company a check for the 20k.

A few months back got an email saying the company had been sold, but not enough to pay off even the debts, so there is nothing left for shareholders.

That being said, it looks like the sale was finalized in early 2023, so that means I shoudl wait until next year's tax returns to report right?

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t1_jefquo7 wrote

Yeah and sorry I misunderstood...I thought you were saying something else.

So, it wasn't a publicly traded company? Did you ever get a K1?

And yes, you have a year to figure it out... Lol

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OP t1_jefr54i wrote

Nope, not publicly traded, only got to Series D and then got acquired for peanuts.

K1? I have no idea what that is. Should I try to find this?

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t1_jefrq0o wrote

K1 shows partnership income, if you invest in a business, you own part of it.

I'd be really careful claiming that loss and definitely talk to a professional. (I am one but I would need to see everything you have to make sure I'm understanding correctly)

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