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Client investment underwater Class B non-voting stock

Technical topics regarding tax preparation.
#1
gstax  
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After a tax return was e-filed for the client, he comes back and says he forgot he had an investment from 2015 that went underwater in 2019. This is Class B non-voting stock of a brewery company. He only has e-mails from the company stating the company closed and will issue some paperwork sometime. He also has paperwork showing the first $5000 of $10000 of investment and the Stock Purchase Agreement proving the price and number of shares.

I asked for any issued 1099 showing the loss for the corresponding year, but he is waiting for any issued document from the company, and he states he does not think it would be in the foreseeable future. The question would be, am I right asking for a 1099-? or do I just take his word he lost the money, or can I verify the company status under edgar, or somewhere? What type of 1099 would be issued for this if any?

- Should I also amend his two non-resident states for this?

Thank you for your help.
 

#2
sjrcpa  
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No 1099 would be issued unless they gave him a liquidating distribution of some sort.
 

#3
gstax  
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sjrcpa wrote:No 1099 would be issued unless they gave him a liquidating distribution of some sort.


Could he still get the capital loss for $3000 and carryforward the rest to other years, just with proof of his investments? Also, could it be postponed till 2020 although he says the company announced it went underwater in 2019.
 

#4
Anderly  
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Don't forget to look at §1244 to see if it qualifies for ordinary loss treatment
 

#5
Nilodop  
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Please read section 165(g)(1) and (g)(2).
 

#6
gstax  
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Anderly wrote:Don't forget to look at §1244 to see if it qualifies for ordinary loss treatment


Thank You.
 

#7
gstax  
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Nilodop wrote:Please read section 165(g)(1) and (g)(2).


Got it!
 


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