I bought into a company that has since dropped in value significantly. Can I deduct my loss?

Posted by admin
golden_mesa asked:


Purchased about five years ago while on the Board of Directors. Since then the company has been bought out and my ownership share has been significantly diluted. This is not a publicly traded company. From an initial investment of $500,000, it is probably worth about $10,000. Would this qualify for a tax loss and is it an ordinary loss or a capital loss?

CARMEN
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This entry was posted on Friday, January 23rd, 2009 at 6:22 am and is filed under United States. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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2 Responses to “I bought into a company that has since dropped in value significantly. Can I deduct my loss?”

  1. KIM Says:
    January 25th, 2009 at 3:59 am

    FLOYD

    It is not a loss until you actually dispose of the investment. If you only dispose of part of it then only a portion is “recognized”.

    You can sell it and buy it back and deduct the loss if you wait at least 30 days to sell it back.

    As a suggestion, as the company if they are willing to buy back some shares?

  2. MARY Says:
    January 26th, 2009 at 9:16 am

    NOAH

    its an ordinary loss. u can find the best to gt tax deductions

    the following will help u in finding the information