Shares in a start up investment that declared Chapter 7 bankruptcy 10/1/2024

Kathy
Kathy Member Posts: 2 Newcomer
in Live Q/A Event

What documentation is required to start deductions for the loss?

What page/form will capture this information in FreeTax

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Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 177

    Hi Kathy,

    Thanks for joining our Live Event today!

    Your best bet is to speak with the accountant, CPA, or attorney handling the bankruptcy investment related information. There are many details involved, including if this was a business Partnership for instance, or an S-Corp? What sort of tax structure was the investment under? Is the bankruptcy finalized, or only filed as of 10/2/2024?

    Your question is outside the scope of our services and requires a more thorough and detailed conversation for best service.

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  • Kathy
    Kathy Member Posts: 2 Newcomer

    If the answer is yes, I can start recognizing the loss, where would that be stated within FreeTax or can't I use FreeTax software for 2024 filing?

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  • AndyS
    AndyS FreeTaxUSA Agent Posts: 14

    In general, if your investment in the startup was a Partnership or S-Corp that failed, they should file a final tax return providing you with a K-1 to report on your personal return with your losses. As long as it's a situation we support, you should be able to enter your information in our software.

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