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DRJ69

04/21/24 2:26 PM

#69460 RE: Denn55 #69458

A company only becomes worthless when it becomes bankrupt. There are companies that show a zero or negative net worth on a balance sheet, but they only become worthless once the company is liquidated, if the liabilities are more than the assets. Example, a company can show zero or negative net worth, but that can be misleading, typically, assets are valued at cost or market, whichever is lowest. Real estate, especially land, buildings, etc. are valued at cost or market, whichever is lower. Now, buildings get depreciated over many years, so your basis drops every year, but in reality, if the property is maintained, it obviously is worth more than your basis after depreciation, in fact, it is worth probably worth a lot more than what you paid for it, as well as the land. I could give other examples as well, but one sample at a time.