Posted On: 04/10/2014 7:47:35 PM
Post# of 56324
Here's what I found. Hope this helps.
Report the valueless stock on line 1 of Part I or line 3 of Part II of Form 8949, depending on whether it was a short-term or long-term holding. If an asset became worthless during the tax year, it is treated as though it were sold on the last day of the year. That could affect whether your capital loss is a short- or long-term one.
Your worthless stock losses, either short-term or long-term, can offset capital gains dollar for dollar. If you have more in capital losses than gains, then your loss can offset ordinary income up to $3,000. Additional losses can be carried forward to future tax years.
If you discover you didn't claim a valueless stock loss on your original tax return in the year it became worthless, you can file a claim for a credit or refund due to the loss. Just file Form 1040X to amend your return for that year.
You have up to seven years from the date your original return had to be filed or two years from the date you paid the tax, whichever is later.
For additional information, check out Chapter 4 of IRS Publication 550, Investment Income and Expenses.
Report the valueless stock on line 1 of Part I or line 3 of Part II of Form 8949, depending on whether it was a short-term or long-term holding. If an asset became worthless during the tax year, it is treated as though it were sold on the last day of the year. That could affect whether your capital loss is a short- or long-term one.
Your worthless stock losses, either short-term or long-term, can offset capital gains dollar for dollar. If you have more in capital losses than gains, then your loss can offset ordinary income up to $3,000. Additional losses can be carried forward to future tax years.
If you discover you didn't claim a valueless stock loss on your original tax return in the year it became worthless, you can file a claim for a credit or refund due to the loss. Just file Form 1040X to amend your return for that year.
You have up to seven years from the date your original return had to be filed or two years from the date you paid the tax, whichever is later.
For additional information, check out Chapter 4 of IRS Publication 550, Investment Income and Expenses.
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