Investor Help (NO Ihub questions)

[cintrix]

What would be the point of paying $5 to get rid of a "worthless" security?

-Well, I could think of a few. One that you brought up. If they are penny stocks that you have held for many years the chance of them reversing again and hitting you with another reorg fee are possible. Wouldn't you rather pay $5 to get rid of them then chance a $38 fee down the line? Why can't you just sell them online yourself instead of having Etrade do it? The way it used to work was (and I point this out because they have changed so many rules since MS took them over) if say you sell the entire position, they only charge a commission up to what it was worth. So if your entire position only comes to $3 but you pay $5 commission, they just charge the commission at $3.

-Not sure if theses stocks are actually "worthless." If they are still trading and doing reorg like reverse splits then they are not considered worthless. You could clean up your account and have a nice loss to offset your gains so you don't have to pay any taxes on them. If those losses exceed your gains you can use them each year as a carry over to offset future gains as long as your bottom line doesn't exceed a negative 3k for the year.
If they are truly "worthless" and they are listed under a cusip number you technically need to rid of them the year they officially became worthless. If you didn't do that in the year they became worthless you could always go back and do an amended return - I think you have up to seven years to do that.

Going back to pre MS, I have in the past removed stocks that were listed in my port as a cusip. I thought they would be considered worthless but Etrade figured them in as a total loss on my 1099. Maybe a stock isn't considered totally worthless even when it is under a cusip.

I'm guessing from your description that your stocks aren't truly "worthless" and you can easily use them as a tax loss. Unless you are still following them and you think there is a future event that may catapult them why bother keeping them?