U.S Fuel Corp. (fka USFF)

[honyaker]

http://www.fool.com/taxes/2000/taxes000630.htm

Consider selling the junk for pennies to a friend or distant relative. (In-laws qualify, as does anyone other than your spouse, siblings [either whole or half-blood], ancestors, or lineal descendants.)

You then have a closed transaction, and the loss is certain and deductible in the year of sale. If the stock ever comes back and is worth something, at least the money stays with friends or family. Here's how you might do it:

Get the actual stock certificates from your broker.
Formally sell the shares to the purchaser, with a check for payment and a bill of sale.
Sign over the stock certificate (on its back) to the purchaser. Have the signatures verified by your banker and/or a local stockbroker.
Send the certificate to the stock transfer agent. Explain that the shares have been sold, and ask them to cancel the old shares and issue a new certificate to the new owner.

Bingo! For a pittance, your friend or relative has just bought a placemat or birdcage liner... but you have a capital loss. You have a stock sale, a closed transaction, and an indisputable loss. No financial statement review and analysis. No subjective decisions regarding any potential future turnaround by the company. No second-guessing from the IRS. Sweet.

For more information on worthless securities, check out IRS Publication 550. But remember that even Publication 550 doesn't address the complex issue of exactly when a stock becomes worthless in the eyes of the IRS. So, if you are holding some questionable stock, consider selling the junk and being done with it.