GREY:EORBF - Post by User
Comment by
notmuchmoreon Sep 11, 2020 5:39pm
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Post# 31547048
RE:RE:Question
RE:RE:QuestionI found this published by the IRS (United States taxpayers) at https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/losses-homes-stocks-other-property/losses-homes-stocks-other-property-1: "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 Form 8949, Part I or Part II, whichever applies. Indicate as a worthless security deduction by writing Worthless in the applicable column of Form 8949."
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