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Re: SmellMyFinger post# 58470

Wednesday, 01/24/2024 10:59:35 AM

Wednesday, January 24, 2024 10:59:35 AM

Post# of 58491
Will your broker dump your shares out of your account? That's what all those $.000001 trades are.

This was pulled from the IRS website.

Question
I own stock that became worthless last year. Is this a bad debt? How do I report my loss?

Answer
If you own securities, including stocks, and they become totally worthless, you have a capital loss but not a deduction for bad debt. Worthless securities also include securities that you abandon. To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it.

Treat worthless securities as though they were capital assets sold or exchanged on the last day of the tax year.
You must determine the holding period to determine if the capital loss is short term (one year or less) or long term (more than one year).
Report worthless securities on Part I or Part II of Form 8949, and use the appropriate code (see the Instructions for Form 8949) for worthless security deduction in the applicable column of Form 8949.


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