I was heavily invested in DNR when they went into Chapter 11 last year. The nullified their common stocks. (-54,000 shares) Then they replaced them with 140 warrents for the restructured DEN (DNRRW).
Do I get to write off that loss? Then if I sell my warrents, then claim those as gains?
or
Do I have to sell the warrents to declare the loss?
Either way, I havn't gotten anything denoting the loss, it is only marked on my investment returns as a "non; reportable action"
How do I file that?
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It depends. If you have a document that clearly states your stock shares are worthless, then you can deduct your capital loss.
You can report them in the year they are deemed to be completely worthless. This usually happens when a company stops doing business or files bankruptcy. You should be prepared with your proof and retain it in your tax file.
The sales price would be zero and the cost basis would by what you actually paid for the stock. You should use the description as 'Worthless ABC 5Sh' (example).
To enter worthless stock as investment sales:
Helpful Information:
A capital loss occurs when you completely dispose of any stock you previously purchased. Until you dispose of the stock you originally invested in there will not be a tax loss.
A stock warrant gives holders the option to buy company stock at the exercise price until the expiration date and receive newly issued stock from the company.
So if I get this right, when they disolved my shares, that does count as disposing of my shares, thus I should write off my purchase price, as the warrents aren't the stocks, they are just a chance to buy back in at a later point?
It depends. If you have a document that clearly states your stock shares are worthless, then you can deduct your capital loss.
You can report them in the year they are deemed to be completely worthless. This usually happens when a company stops doing business or files bankruptcy. You should be prepared with your proof and retain it in your tax file.
The sales price would be zero and the cost basis would by what you actually paid for the stock. You should use the description as 'Worthless ABC 5Sh' (example).
To enter worthless stock as investment sales:
Helpful Information:
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