I think the IRS needs a 1099, which is generated by a sale. Obviously, there is no market for this catostrophe, but most brokers will generate you a sale ticket, which generates a 1099, if you ask. They will "buy" your whole position for a buck. That gives you the evidence you need to show the IRS that you had a loss.
There is the possibility, though IMO not a great one, that the IRS would take your "explanation" in lieu of a 1099. However, if the sum is lumpy, that might put you on the IRS's radar, which might not be a good thing, depending how "honest" you are. With the 1099, you have evidence of a sale, and the IRS could match the date of your reported purchase with a quick look-up.
My advice, and I'm no tax consultant, is to call your broker, explain the situation, and see what they can do to help.
Much smoother, IMO, that way.
