I already took my loss on my taxes last year after all the brokerages expired the old shares as worthless.
I assume there is going to be a bunch of different ways people are going to report this scenario on their taxes. This is not a common outcome so I have no idea what the proper method is.
If we ever trade, and I am able to sell my shares, I am going to put the basis of new shares at 0 dollars. I am going to come out way ahead by offsetting the gains(if there are any) with my capital loss carryover, versus someone who uses the cost basis of there original purchase...but who knows what the correct method is! I guess I will find out if I get audited.
Assuming this math is correct with sample numbers on someone using original basis:
Original Basis $10,000
Sale Price $15,000
15% tax on 5,000 gains = $750
Total after tax = $14,250
Me Using new basis and loss carryover:
Original Basis $10,000
Loss Carryover $7,000(Used 3,000 on tax return last year)
New Basis $0
Sale Price $15,000
15% tax on 15,000 = $2,250
Loss Carryover = $7,000 - $2,250 = $4,750
Total after tax = $15,000, and I still have 4750 of losses to use! Crazy!
This seems completely bogus..but who knows?
How has everyone else reported this thus far?
