If you have invested in a business that failed in 2004, you can take a capital loss this
year. To take the loss, your holding in the failed enterprise must be absolutely worthless.
However, it may be hard to show that a business has no value at all.
A better strategy is to realize your capital loss by selling your interest in the business to
an unrelated party for a nominal amount. For example, you might sell your interest in the
failed company to a friend for $1. As long as you make the sale by December 31, you can claim
a capital loss for 2004.
