How to write off losses from Russia ETF investment on taxes?

This is actually a complicated situation many investors are facing with Russian securities. The IRS treats worthless securities as capital losses, but the tricky part is determining when (or if) they officially became "worthless" for tax purposes. Since the Moscow exchange suspended trading in many securities and there were sanctions imposed, your ERUS shares aren't technically worthless - they're just currently untradeable. This is why Vanguard hasn't included them on your 1099-B. In tax terms, there hasn't been a "realization event" yet (like a sale or official worthlessness determination). You have a couple options: 1) Wait for an official determination or for Vanguard to issue corrected tax forms, or 2) You could potentially claim a worthless security deduction under Section 165(g) of the tax code if you can document the securities are genuinely worthless with no reasonable hope of recovery. The safest approach is waiting for more guidance from Vanguard or official announcements regarding the ETF's status. Claiming the loss prematurely could result in issues if the securities ever regain value.

I was in the exact same situation with about $12k in Russian ETFs that basically vanished. After tons of research and getting nowhere with my broker, I discovered taxr.ai (https://taxr.ai) which helped me figure out exactly how to document and claim the loss. Their system let me upload my statements and the sparse communications from my broker about the suspended trading. They then provided me with a detailed analysis of how to properly document the loss and the specific IRS guidelines that applied to my situation. They even generated the documentation I needed to submit with my return to support claiming these as worthless securities. The most valuable part was they highlighted the specific section of the tax code that applied to my situation and gave me everything I needed to properly report it - something none of the regular tax prep software could handle.

I wanted to follow up on my skeptical comment earlier. I actually decided to try taxr.ai with my own Russian investment situation and I'm genuinely surprised by how helpful it was. They provided me with a comprehensive analysis referencing IRS Revenue Ruling 90-49 and several tax court cases that established precedent for claiming losses on securities that remain in limbo due to government actions. What convinced me was their detailed explanation of the "closed and completed transaction" doctrine as it applies to Russian securities under sanctions. They didn't just tell me to claim it as worthless - they helped me properly document my reasonable abandonment of the investment with the right forms and supporting evidence. This is definitely not the same as the generic advice I got from my regular tax person.

After dealing with a similar situation with Russian securities and getting nowhere with endless calls to my broker and the IRS, I finally used Claimyr (https://claimyr.com) to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c It was amazing to finally speak to someone at the IRS who could give me official guidance. The agent confirmed that I could claim a worthless security deduction in the current tax year if I had a reasonable basis for determining the securities had no value, even without official confirmation from my broker. The call saved me hours of frustration and uncertainty, and I was able to get specific instructions on how to document the loss on my return. Really worth it after the months of getting nowhere with automated phone systems.

I need to eat my words from my previous comment. After being at my wit's end with trying to reach the IRS about my Russian ETF losses, I decided to try Claimyr despite my skepticism. Within about 50 minutes (while I was doing other things), I got a call connecting me directly to an IRS agent. The agent was actually super helpful with my Russian securities question. She confirmed that I could claim them as worthless under Section 165(g) if I could document that they had no current market value and no reasonable prospect of regaining value. She also advised me to include a detailed statement with my return explaining the situation and referencing the ongoing sanctions. This saved me from potentially making a costly mistake on my taxes. I'm still shocked at how well it worked after weeks of failed attempts on my own.

For what it's worth, I spoke with my CPA about this exact situation with Russian ETFs, and he suggested filing Form 8949 with the appropriate adjustment code to report the loss. In my case, we used code C (for sales not reported on 1099-B) and included a detailed explanation statement. The key was documenting that the securities were effectively worthless due to sanctions and the indefinite suspension of trading. My CPA said it's similar to how worthless securities from bankrupt companies are treated - you don't always get a 1099-B, but you can still claim the loss with proper documentation.

Has anyone tried reaching out to iShares directly about this? I emailed their investor relations department about a similar situation with a different Russian fund, and they eventually sent me a letter confirming the fund was "indefinitely suspended with no current market value" which my tax preparer said was sufficient documentation for claiming a loss.

This is incredibly helpful information, everyone! I'm in a similar situation with about $7,200 in ERUS that's been stuck since the sanctions hit. Reading through all these responses, it sounds like there are actually several viable approaches to handling this. The most encouraging thing is hearing from multiple people who've successfully claimed these losses using different methods - whether through direct IRS guidance, CPA assistance, or fund company documentation. It's clear that while the brokerages haven't been helpful, there are legitimate ways to handle this situation. I think I'm going to try the BlackRock route first since that seems like the most straightforward way to get official documentation. If that doesn't work out, I'll consider some of the other services mentioned here. Has anyone had success with other Russian ETFs besides ERUS, or is the situation pretty similar across all of them? Thanks again for sharing your experiences - this has been way more helpful than anything I've found elsewhere!

I'm in the exact same boat with about $8,400 in ERUS that's been frozen since the sanctions hit. This thread has been incredibly eye-opening - I had no idea there were so many different approaches to handling this situation. What's really encouraging is seeing multiple people successfully claim these losses through different methods. I've been stuck in analysis paralysis for months, not knowing whether to wait it out or take action. The consensus here seems to be that waiting indefinitely isn't necessary if you can properly document your position. I think I'm going to try a combination approach based on what I've read here: first contact BlackRock for official documentation, then review IRS Publication 550 that Jasmine mentioned, and if needed, use one of the services mentioned to get direct IRS guidance. The key seems to be having multiple sources of support rather than relying on just one method. One question for those who've successfully claimed these losses - did you face any pushback during filing, or did your returns go through without issues? I'm wondering if the IRS is seeing enough of these cases now that they're becoming more routine to process. Thanks to everyone who shared their experiences - this is the most practical guidance I've found anywhere on this frustrating situation!

This thread has been incredibly informative! I'm dealing with about $3,800 in ERUS that's been stuck since the sanctions, and I was getting nowhere with my broker. Reading through everyone's experiences has given me hope that there are legitimate ways to handle this. What strikes me most is how many different successful approaches people have used - from getting BlackRock documentation to using IRS Publication 550 guidelines to getting direct IRS guidance through services like Claimyr. It shows there isn't just one "right" way to handle this unusual situation. I'm particularly encouraged by The Boss's update about their return being accepted without issues. That suggests the IRS is becoming more familiar with these types of claims and processing them routinely when properly documented. My plan is to start with contacting BlackRock for official documentation about ERUS being indefinitely suspended, then use that along with Publication 550 as regulatory backing. If I need additional support, I might try one of the services mentioned to get direct IRS guidance. One thing I'm curious about - for those who've filed successfully, did you use any specific language or forms beyond the standard Schedule D and Form 8949? I want to make sure I'm documenting this properly to avoid any potential issues down the road. Thanks again to everyone for sharing your real-world experiences. This is exactly the kind of practical guidance that's been impossible to find through traditional tax resources!