Conference nyoss1::market_investing

    I think you need a letter from your broker saying they are worthless,
    and you can then take the loss. But then if they ever do become
    something, you  have to reclaim the loss plus the profit.  I doubt,
    however, that that happens with most stocks in this situation.
    
    For more specifics, I believe one of the IRS publications covers what
    you need to have a stock declared worthless. Call and ask them to send
    it.
    
    

    If these stocks are no longer listed on the pink sheet(penny stocks)or
    stocks at all. Per the IRS you may not be eligible to recover any loss.
    A stock must have "some" value to take a loss. I believe some equates
    to listed or sold.
    
    fwiw

    I can't get a note from the original broker,,,because he is worthless
    now (in jail). I do however have the sheet showing how much I purchased
    them for several years ago but have to assume they are worth $0.00 now.
    
    The IRS sounds like it's worth a try..........
    
                                Thank you
                                     -Steve

    I agree with .1; you can declare them worthless now, take the loss
    against your capital gains. As a stockholder, you should have been
    getting reports from the company of its filing for bankruptcy, etc.
    That documentation should be enough to satisfy the IRS that your stock
    is worthless. I don't think you need to actually sell the 
    shares (presumably for nothing, minus commission) to claim the loss.
    
    I have stock in one company which went bankrupt in 1987, and that is
    the strategy I followed. With the bankruptcy notification in my tax
    folder, I don't think an IRS auditor could argue that my stock is worth
    anything any more, so I took the loss.
    				JIm B.
    

    Gotta be careful. You may still have some value because the company 
    could have been bought, took a new name or whatever. Saw a report on
    "It's your Money" and there's people out there that'll do the research
    for a cut of what they find, can't remeber off hand. Especially if
    you've held it for a long time. Back-office record keeping sometimes
    gets messed up and the owner of record gets lost but the shares still
    exist. Just an option...
    						Dan

    If you call the IRS and ask how to determine if a stock is worthless
    and whether you can take a loss on it, they will tell you how to make
    that determination. They will refer you to one or two publications that
    are available in larger libraries that list every stock being traded
    now and in the past. It will tell you the status of the stock and if it
    is worthless, it will say so. I believe this is the only proof the IRS
    will accept. I asked if they would accept a letter from my broker and
    they said they would not. Unfortunately, I don't remember the name
    of the book, but I did find it in the Worcester Library. Your deduction
    may be disallowed if you do not follow their guidelines.
    
    Only problem I can see in this procedure is that I don't know if it
    lists penny stocks. You'll have to ask or take a look for yourself.
    
    Ray

    I did call the IRS and they sent me the form to fill out to call it a
    loss. I have not read it but my wife says it is straight forward. The
    only question we cannot answer is the actual date when the stock became
    worthless. We were never notified so will have to aprox. the year and
    day.................
    
                                           -Thanks for the help
                                              -Steve
    
    I took 2 weeks to get the publication.

    RE .5	Son of a gun you were right.........After holding the stock
    		for several years,they stopped trading and stopped sending
    		me any financial information, so I checked with an advisor
    		and he could not find the stock listed anywhere.
    
    		Now,,,here's where Murphy's Law kicks in. This year we
    		decide we need the deduction and write it off as a complete
    		(loss),,,,send in our 1040,,,and sure enough within 2 weeks
    		they send us an Acquisition Statement with a reverse split
    		enclosed ( 1 for 1,363.341473) and change of name of the
    		company. 
    
    		Now what ??? I must have to file an Amendment on my Tax
    		Return. 
    		Companies should not be allowed to wait 7 years with no
    		contact with shareholders, and then spring the big change
    		on you...........
    
                                                -Steve

    re .8
    If you had someone from a brokerage write you a letter claiming they
    could not find a market for the shares (not sure of appropriate
    wording, but gist is - cant trade stock), and this had been
    documentable in 1994, you might have been OK. I'd check on this.
    You don't actually have to have a sale to declare a loss.
    
    This sounds like someone is trying to resurrect the company, leaving
    all the previous holds with a pittance. It might not be considered
    alive enough to disallow your attempt to write it off in 1994. But if
    you do get the writoff, you now have a 0 basis in the junk you are
    holding.                     
    
    

    
    Well,,,actually what happened is the MAJOR shareholders of the almost
    collapsed company (and without any proxy or input from minor holders I
    might add) voted to fold the old company and liquidate ALL capital
    assets and purchase another established LOOSING company with hopes of
    turing it around. The real sad part is the president and VP , who are
    lawyers by nature, charged their FORMER defunk company lawyers fees in
    the tune of $650,000 to work the paperwork from the old to the new
    company......
    	Well,,,now instead of 35,000 shrs. of HDL Communications,,I own 35
    shrs. of Bikers Dream Inc. (Harley aftermarket products in California).
    HDL was a publishing company of "How To" books......
    
                                  -Steve

    Re .7:

    Steve,

    Could you post the IRS form number that you got to declare
    your stock worthless?  Thanks.

    -Jerry

    
    ,,,sorry for the late reply,,,it was Schedule D -Capital Gains or Loss
    
                                              -Steve