Tax implications for bankrupt company - help!?

hi, i invested in a private company in 2000 (bought shares0 and the company went bankrupt in 2005. i invested $20,000. how much can i deduct from taxes as an investment loss for 2006?

thank you.

What you do is you list each individual purchase of stock on your schedual d. Put the original cost of each purchase as you normally would, and write the word "worthless" in the box for your sale price.

This will allow you to deduct the entire cost of the stock.

(Keep in mind that you're entering these items within the gates of the "netting process", and you can only deduct a portion of losses each year. Everything over the limit becomes a "loss carryover" that you can apply to future tax years until it's used up. The limit for each year is $3000--$1500 per person if you file married seperate.)

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