Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I have no gains. I am assuming that if I do have some gains in some of the next 33 years that I could use this to counteract that. Or does the sentence, "Worthless stock can only be written off in the year it becomes worthless." mean that it can't be written off after that year? I am assuming that it means that it cannot be written off until it is declared worthless by the bankruptcy courts.

If the court declares the stock worthless, you show the loss on that year's Schedule D. It then becomes a capital loss carryover, as previously discussed, which is available to be applied against gains on future Schedules D. Each year the carryover is applied first to Schedule D, then if the Schedule D bottom line is a loss, $3,000 is used and the balance carried forward to the next year, where the process begins again. See Schedule D and its instructions. There's also a very good article in the FAQ on Netting Capital Gains and Losses that covers carryovers.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.