My father is not working and is my dependent. I have him $5,000 cash as a gift in 2020. He “invested” it in stock market (bought an option for something), and lost it all.
If he had any income, then he would have got the tax credit. Unfortunately, he doesn’t have any income. Can I get a tax credit for that $5,000 loss?
Assuming that this is the U.S. then if your name is not on the brokerage account then you can neither be taxed nor can you deduct the loss. Your father's social security number is what the broker uses for reporting the transactions to the IRS.
Per your comment, he will be able to carry over that loss to the next year. Fairmark.com provides an explanation and an example:
Your capital loss carryover is reduced by the amount of capital loss that was actually used to reduce your taxable income, not by the amount of capital loss deduction shown on your tax return. In figuring this amount, you’re allowed to use all other deductions before using the capital loss deduction. This rule is reflected in a Capital Loss Carryover Worksheet that appears in the instructions for Schedule D and also in IRS Publication 550, Investment Income and Expenses.
