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I would most certainly expect so. When an issue comes do, after all the 1099-INTs, DIVs, or OICs, there's a 1099-B recording to the sale. Typically, the cost basis = the total maturity price/sale price, so it's an even 1099-B (no loss or gain). In your case, it'll be worthless, so your adjusted cost basis will be the full value of the purchase + interest with a sale of zero.

Only thing I can't quite figure out how to resolve is any long term vs. short term tax rate concerns that may creep up, but you will indeed claim the loss when it's deemed worthless.
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