KMyles: "I guess my explanation of the situation wasn't totally clear. They were company stock options. The CEO of the financial club was good friends with the CEO of the company that offered the stock options. He allowed a certain number of options to be sold by the financial club. So am I allowed to write this off as worthless stock? And if so, how much of it?"Now I am even more confused (and I still cannot answer your question). Did you buy stock or did you buy options? And why should that make a difference? I believe that options are also similarly regulated. Selling unregistered stock (or options), unless falling into one of the exceptions for private sales, still seems very problematic to me. I would pursue this angle.Also, I know little about investment clubs, but I assume that the tax treatment for individuals may well differ depending upon how the clubs are structured. Hearing "CEO of the financial club" makes me thing corporation or LLC. Did you own the (now failed) investments or did the financial club?It seems that there should be a method for writing off a real investment loss, but you may better served by seeking personalized advice from someone to whom you can explain the entire situation; the limited information available to the board makes me (and I suspect others) reluctant to even hazard a guess. Just my $0.02. Regards, JAFO
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