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I invested $5000.00 in a business with Conner Legacy

Customer Question
I invested $5000.00 in...

I invested $5000.00 in a business with Conner Legacy Inc.,called Heckler Sports which failed and all assets lost. I received nothing and lost the entire investment. How do I claim this loss on my taxes?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Heckler Sports was a social media startup that allowed sports fans to communicate during professional sports games and "heckle" each other. It seemed to have great potential, but did not catch on as we had hoped.

Accountant's Assistant: Is there anything else important you think the Accountant should know?

No, I don't think so.

Submitted: 28 days ago.Category: Tax
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3/26/2018
Tax Professional: Lev, Tax Advisor replied 28 days ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,707
Experience: Taxes, Immigration, Labor Relations
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If you own securities, including stocks, and they become totally worthless, you have a capital loss but not a deduction for bad debt. Worthless securities also include securities that you abandon.

To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it.

Treat worthless securities as though they were capital assets sold or exchanged on the last day of the tax year.

You must determine the holding period to determine if the capital loss is short term (one year or less) or long term (more than one year).

Report worthless securities on Form 8949, Part I or Part II, whichever applies. Indicate as a worthless security deduction by writing Worthless in the applicable column of Form 8949.

Let me know if you need any help with reporting.

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Customer reply replied 28 days ago
would the investment I made be considered a worthless security? If so how do I report the loss?
Tax Professional: Lev, Tax Advisor replied 28 days ago

Based on your information - yes - it is a worthless security.

You will report disposition of the worthless security as deemed sale at zero price.

As your basis (original investment) was $5000 - you will realize $5000 capital loss.
That is reported on form 8949.

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Tax Professional: Lev, Tax Advisor replied 22 days ago

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues.

.

I would like to take this opportunity to wish you peace, love and happiness. Happy Easter!

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