Nonbusiness Bad Investment

[quicksam]

I have a couple who invested $10,000 with a company that promised them big returns on their money. Their was never any stock issued, just an agreement on paper. The company has went belly up, and they never received any return on the investment, nor their $10,000 back.

If this is claimable, where should I report it? Schedule D or Schedule A

Thanks for any help!

[solomon]

The details are lacking for a reasonable answer. What was the nature of the investment and how long held, for example. Was this a theft event - which would be the most advantageous under §165(c)(2).

If not a theft with some good proof, then it must be an investment just gone bad. If it were capital in nature, then my guess would be Sch D.

BTW, what did the agreement say?