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What documents do I need to report a loss on an investment in a foreign business?
Hi, I invested 20k in a farm business in south america. It is not going well and I don't expect I will ever see any return of any of the money.
This "loan" was made to a small, local business, at this point I only have a document saying My 20k gives me a 20% interest in the business. I withdrew this money from my IRA so I want to be able to deduct my Losses to balance out my (early withdraw penalty) taxes. Thanks, |
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Logically, you could not take a loss unless you sold your 20% ownership stake back to the majority owner for LESS than the $20,000 you paid, or until the business closes down for good.
In either case, you will need paperwork to document the sale in the event the IRS challenges the loss on your tax return. |
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