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Level 1
Oct 25, 2023 9:39 PM UTC
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worthless stock

Inherited stock certificates 5 years ago of a going concern. I discovered this year (2023) that the company went bankrupt 3 years ago. Question - does the "sale" have to take place in the year the stock becomes worthless (in this case 2020, the year of bankruptcy) or can I file the loss this year? As you can probably tell, I'm trying to avoid  having to file amended returns.

ConyEA2021Answer
Level 3
Oct 25, 2023 9:55 PM UTC

Hi,

 In general, you can only deduct the worthless stock in the year that it became worthless. In your case, since the company went bankrupt in 2020, the loss would have to be claimed on your 2020 tax return. even if you sold the stocks in a later year.

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Level 3
ConyEA2021Level 3Answer
Level 3
Oct 25, 2023 9:55 PM UTC

Hi,

 In general, you can only deduct the worthless stock in the year that it became worthless. In your case, since the company went bankrupt in 2020, the loss would have to be claimed on your 2020 tax return. even if you sold the stocks in a later year.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer".
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