There are two ways to take a loss on this: (1)
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Posted On: 07/03/2019 11:02:09 PM
There are two ways to take a loss on this:
(1) see if the transfer agent will mail you your actual certificates and then sell them to someone for $1. At that point, you have a taxable event (i.e. loss). I tried to do this, but was unable to get the agent to mail the shares - maybe you will have better luck.
(2) the other way is to document in your own tax files why you are taking the position the shares are worthless, and assuming you have a reasonable position that you would be comfortable presenting to an irs auditor, then you would take the loss at that point. Factors such as: the stock has been suspended for x-months/years; they haven’t made an SEC filing since x, 201x; multiple lawsuits outstanding, senior management quit/fled all provide good (defendable) indicators this stock is worthless.
If for some reason the stock does trade again and you sell it for more that $0.00, you would recognize 100% of the proceeds as a gain, since you had previously written off your entire basis as a loss.
Consult your tax advisor on this - I’m a CPA, but not a tax CPA. But this is what a couple of people in my firm suggested.
(1) see if the transfer agent will mail you your actual certificates and then sell them to someone for $1. At that point, you have a taxable event (i.e. loss). I tried to do this, but was unable to get the agent to mail the shares - maybe you will have better luck.
(2) the other way is to document in your own tax files why you are taking the position the shares are worthless, and assuming you have a reasonable position that you would be comfortable presenting to an irs auditor, then you would take the loss at that point. Factors such as: the stock has been suspended for x-months/years; they haven’t made an SEC filing since x, 201x; multiple lawsuits outstanding, senior management quit/fled all provide good (defendable) indicators this stock is worthless.
If for some reason the stock does trade again and you sell it for more that $0.00, you would recognize 100% of the proceeds as a gain, since you had previously written off your entire basis as a loss.
Consult your tax advisor on this - I’m a CPA, but not a tax CPA. But this is what a couple of people in my firm suggested.
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