Replies to post #310199 on CMKM Diamonds Inc (fka CMKX)

[oldno70]

That is from 2004

Notice 2004-27, 2004-16 I.R.B. 782 (4/19/2004)

Part III -- Administrative, Procedural, and Miscellaneous

Loss Deductions for Diminution in Value of Stock Attributable to Corporate Misconduct

Notice 2004-27

The Internal Revenue Service and Treasury Department are aware that some taxpayers who acquired stock on the open market for investment have been advised that they may be able to deduct as a theft loss the decline in market value of their stock caused by disclosure of accounting fraud or other illegal misconduct of the officers or directors of the corporation that issued the stock. The purpose of this notice is to advise taxpayers that the Service intends to disallow such deductions and may impose penalties under section 6662.


Here is irs updated

Internal Revenue Bulletin: 2009-14
April 6, 2009
http://www.irs.gov/irb/2009-14_IRB/ar07.html