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  1. #1
    Join Date
    Jul 2014
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    26

    Default How to Claim an Investment Loss from a Failed LLC on Your Taxes

    My question is about loss of investment in an LLC. Several years ago, I invested 40K in an LLC that has since closed and sold its assets. After debts were paid, there was still a balance, so the investors lost 100% of their investments. How do I claim this on my taxes? Which form(s) and so on? Thank you.

  2. #2
    Join Date
    Oct 2006
    Posts
    16,381

    Default Re: Loss in LLC

    Quote Quoting camel1971
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    My question is about loss of investment in an LLC. Several years ago, I invested 40K in an LLC that has since closed and sold its assets. After debts were paid, there was still a balance, so the investors lost 100% of their investments. How do I claim this on my taxes? Which form(s) and so on? Thank you.
    If you have exhausted all efforts to collect your investment then you would treat the investment as being sold for zero dollars, therefore generating a capital loss. For this particular tax year I am going to recommend that you use a tax professional rather than attempting to do it yourself. The calculations are a bit complicated.

  3. #3
    Join Date
    Mar 2013
    Posts
    18,150

    Default Re: How to Claim an Investment Loss from a Failed LLC on Your Taxes

    Quote Quoting camel1971
    View Post
    My question is about loss of investment in an LLC. Several years ago, I invested 40K in an LLC that has since closed and sold its assets. After debts were paid, there was still a balance, so the investors lost 100% of their investments. How do I claim this on my taxes? Which form(s) and so on? Thank you.
    Here's some information from the IRS about Capital Losses:

    https://www.irs.gov/uac/ten-importan...ins-and-losses

    Note that if you have no capital gains with which to offset the the capital losses you are limited to a maximum capital loss deduction of $3000 and would have to carry forward the remaining loss at $3000 per year, assuming you have no capital gains in the ensuing years.

    I, too, suggest you hire a tax pro to examine your situation.

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