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Taxtom
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Experience:  25 Years in preparing Personal and Business Tax Retuns
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I own units in an LLC that just notified Members that units

Customer Question

I own units in an LLC that just notified Members that units worthless as of end of 2010. (It did not declare bankruptcy.) Mine are 5 years old, issued orig @ $1/unit, then revalued last @$1.50; also, 25,000 capital contribution units and 100,000 for development contribution. Can I deduct capital loss on my 2010 return?
Submitted: 3 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 3 years ago.

Dear Friend,

 

CERTAINLY YES... Normally you can book capital loss if you sell your investment at a loss. But what about the security / units which are now worthless and no longer traded and cant be sold ? They are still worthless. You cant sell in order to recognize a loss. If you invested in something that is now worthless, you would at least like to be able to deduct the loss as a capital loss.

 

There is an exception to the general rule that you can't claim a loss on a stock investment until you sell the shares. You can take a loss for a worthless security, which can be unit / stock / bond etc..

 

I hope this helps...

Warm Regards,

Customer: replied 3 years ago.
Relist: Answer quality.
i need a US fed tax analyst, an expert in this matter.
Expert:  Rakhi Vasavada replied 3 years ago.

Dear Friend,

 

In that case, I shall opt out and let some other expert assist you.

Warm Regards,

Customer: replied 3 years ago.
thank you
Expert:  Taxtom replied 3 years ago.
Hello, Yes you can take a loss on these units. You would value your investment at the actual amount you have invested. You would first match your loss against any gains you had for the year and then you can right off an additional $3,000 per year and carry forward or back any remaining loss. Thanks Tom
Customer: replied 3 years ago.
So . . . my loss is $125,000 total? or just the capital part, $25,000?
Expert:  Taxtom replied 3 years ago.
Hello, Was your actual cash investment $125, 000.? Thanks Tom
Customer: replied 3 years ago.
no. $25000 cash. also, my husband invested the same.
Expert:  Taxtom replied 3 years ago.
Hello Your investment is limited to your actual cash outlay. Together you can take a loss of only $3000 per year above the losses offsetting your gains. Remember you can also carry forward the losses to future years, I'm sorry I misspoke earlier and you can't carry the losses back since they are considered passive losses. Thanks Tom
Taxtom, Accountant
Category: Finance
Satisfied Customers: 2340
Experience: 25 Years in preparing Personal and Business Tax Retuns
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