SaviCorp (fka SVMI)

[bly03]

truethat,

I'll agree with you that I would like to just sell the shares for a loss for tax purposes. At the end of last year, I started looking at what it would take to declare a stock worthless for tax purposes. Specifically, what I was trying to find out was if I declared them worthless, and then the company surprised me by getting listed again in the future, would I then just handle the shares as though they had a zero cost basis?

When I looked into it, I got the impression that if there even was a slim chance that they could someday trade again, then you couldn't declare them worthless. I read quite a few articles on it (one of them linked below).

http://www.bankrate.com/finance/taxes/writing-off-a-worthless-stock.aspx

Some notes from the linked article:

Worthless means zero value

Before you can use this tax break, the stock must be totally worthless.
Just because a company is in bankruptcy, or its stock isn't trading, doesn't necessarily mean it's worthless.

Documentation for the IRS

When you report a worthless-stock transaction, you don't have to put the details of the stock's demise on your return. However, tax experts say if you're questioned by the IRS, you need to be prepared to show:

There is no hope investors will ever get anything for their holdings. This isn't always easy, so do your homework.

When the security became worthless. You must reasonably determine the date the stock lost all its value.

Once you're armed with that information, it's time to report your loss.

Filling out the form.

Report the valueless stock in either Part I or 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.



The comment that the fact that the stock isn't trading doesn't necessarily mean it's worthless is the one that gave me the biggest concern. (My interpretation is if there is any chance that it will ever trade again, it can't be declared worthless). It seems to me that short of Serge admitting to us that they are never going to trade again, it will be difficult to ever prove the stock to be worthless.

Based on how well the start of this year has gone (for other investments, not SVMI), this does look like it would be a good year to take the loss on this one. In the research I've done so far, I have not found anything that proves to me that I can do this (declare my SVMI stock worthless). If there is anyone with expertise in this field that can point me to good info on the subject, I would appreciate it.