Company stock value became zero after the company filed bankruptcy.

kvraj

How to I report the loss of investment of a company that I had held shares more than 5 years and they became junk and declared bankruptcy. I believe it was bankrupt two years ago and I did not notify that in my return as loss. How do I go about it in my upcoming return for 2024?

AlexO

kvraj,

That is a great question!

You can take a capital loss on Schedule D in the year the security becomes worthless. 

Thus, you should have claimed the loss the year the company declared bankruptcy and the shares became worthless.

If you did not claim that loss in the year they became worthless, I recommend that you amend that return to claim the loss.

Depending on the amount of the loss, the loss may result in a capital loss carryover to be carried to future years. Thus, you may need to amend more than just a single return to continue to claim the loss carryover and the loss may be carried forward to 2024.