Taxpayer was active buying and selling a petroleum company's stock in 2020, generating $40,000 in short-term losses offset by $36,000 in wash sale disallowances (as per the 1099-B).  In November 2020, the company went through Chapter 11 and his stock was exchanged for warrants to purchase fewer shares at a later date.

In the exchange of the stock for warrants, the basis does not include the $36k of disallowed wash sales.  Since the taxpayer does not have the stock anymore, how can I get Lacerte to recognize the $36k of capital losses?

Thanks.

Mike Gilligan