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A few years back I was working for an employee owned mining company. Mining was great, business was great, being fresh out of college I had no debt, so I bought the minimum amount of shares in the company which I could in order to be a shareholder. It was roughly $4,000. A couple years later, mining went to crap and half of us got laid off forcing an automatic share sale, based on the terms of the shareholder agreement. The company didn't have the funds to pay out the shares of everyone who left, using the formula previously used to calculate the share price, so after some legal proceedings they settled on a price slightly above company liquidation value. Being a super minor shareholder in the company (at its height it was worth about 40 million) I didn't have much say in the ordeal, but they paid me back about $1,200.
Lesson learned, don't trust the boss when he's trying to sell the new guy overpriced company shares that don't reflect the capital value of the company But that's not my question.
My question is, since the sale and payment to me took place in 2015, can I deduct this as a tax loss that year year? I know I can do this for typical publicly traded companies like Apple or Google, but can I do it for employee owned companies? Deducting $2,800 from my tax liability would at least be a nice consolation prize.
I should also note that during the course of time which I owned those shares I was paid about $2,000 in dividends, so I don't know if that affects my ability to deduct losses. It shouldn't, because I was taxed on the dividends.
I should also note that during the course of time which I owned those shares I was paid about $2,000 in dividends, ...
div shouldn't effect the capital gains, because you already paid taxes on the dividends.
You should be able to claim 2800 in investment losses.
Ditto, but I'd like to add that you should have gotten a 1099 in 2014 for dividends you received. You should get one for 2015. I got that you worked for this miner for a few years and were paid dividends throughout.
You might also get a 1099 for the shares purchased from you.
It also sounds like you got a pretty good deal on the stock so don't kick yourself. Mining is often a crapshoot and you just didn't spend enough time there to make the stock pay.
If you didn't save a substantial amount of your money and instead spent it on crap then you can go ahead and kick yourself.
agree with the prior posters. One note, I wouldn't expect the company to send you a 1099-B. Private companies dealing in their own shares like this typically don't (and aren't required to) send them. That doesn't change the fact that you sold it at a loss and can take the capital loss on your return.
agree with the prior posters. One note, I wouldn't expect the company to send you a 1099-B. Private companies dealing in their own shares like this typically don't (and aren't required to) send them. That doesn't change the fact that you sold it at a loss and can take the capital loss on your return.
You might get a 1099 Misc. This does not have a box for the sale of the stock. But the end result on your 1040 will be to have the sale recorded on sch D and you have a capital loss.
Seems that over all the years we have had private corporations the IRS has not come up with a good way to report sales. They should use 1099 B but the rules exclude corporations.
You can deduct up to $3,000 in capital losses from your gross income per year. Even if you don't get a 1099-B, deduct the loss anyway. If the IRS asks for proof, just send them the purchase and sale confirmations for the stock.
Were you working at a mine in Michigan? Michigan had a huge number of mines, but I didn't think any of them are left except for the salt mine under Detroit. See link.
Yes, I did deduct my loss from a start up company when I exercised the stock.
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But that's not my question.
