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Lost A Company In a Judgement

Personal Finance & Money Asked by Dustin K on March 30, 2021

I inherited a company from my father. Not sure what the valuation was. I didn’t have any money invested in the company, but the company was sued and we lost it in lieu of not being able to pay the judgment.

If the company was worth say 1,000,000 and I owned 25% of it. Can I continue to write off 250,000 on the capital loss carryover a portion of my taxes? Or do I need to have a cost basis to write it off like this?

One Answer

Your cost basis may be the fair market value at the time of your father's death. Here is the IRS discussion.

Answered by Orange Coast- reinstate Monica on March 30, 2021

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