Tax Deduction Consulting: Worthless Stocks Brigham City UT
Salt Lake City, UT
Exit Strategy Specialists, LLC
Years of Experience: 26
IARFC, MDRT, FPA
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Executive Compensation Planning, personal Coach, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, Mortgage Loans, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Business Coach, Charitable Planning, Education Plan, Asset Protection, BuySell, Compensation Plans
West Valley, UT
MOUNT PLEASANT, UT
HILL AFB, UT
Salt Lake City, UT
Education: BSc (Math)MBA
Years of Experience: 16
IARFC, MDRT, NAIFA
Invoice, Estate Planning, Business Planning, Portfolio Management, Pension Planning, Executive Compensation Planning, Retirement Planning, Medicaid Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Long Term Care Insurance, Group Insurance, Charitable Planning, Education Plan, Charitable Foundations, Asset Protection, BuySell, Compensation Plans
St. George, UT
Tax Deduction Consulting: Worthless Stocks
Turning Your Worthless Stock Into A Tax Deduction
Own stock in a company that went bankrupt this year? You are not alone. Fortunately, you may be able to take a income tax deduction on that worthless stock.
Good year or bad, there are always going to be a number of publicly traded companies that crash and burn in a given year. Remember, Enron was a disaster in the middle of one of the strongest economic environments in years. Of course, there has been more bad news than good since then, so failing companies have become a bit of the norm.
How does the IRS view stock in a failed company? Well, it is seemingly simple, but a bit technical when looked at closely. Generally speaking, the IRS takes the position that completely worthless stock should be treated as though it was sold on the last calendar day of the year in question. The question, of course, is what does "completely" mean? The answer is a totally worthless stock. This means one that is no longer traded anywhere. Many taxpayers get into trouble by claiming this deduction when a stock is delisted. A delisted stock may not be on NASDAQ or NYSE anymore, but it could still be trading on the pink sheets or warrant markets. If so, it is not completely worthless.
To claim the deduction, you'll need to get Schedule D for the 1040 tax form for the year in question. The entry is made in lines 1 or 8 depending on whether the stock was held short term or long term. Keep in mind, the date used to determine this is the...