"Would anyone please tell me how to deal with the stock from a bankrupted company?" You can sell it for practically nothing or hang onto it and hope. "Can I just use the purchased amount to calculate the capital lose?" No. Sometimes stock in a company going through bankruptcy may come back and do quite well. If it is formally declared worthless, then you can use your basis and call the present value zero, but in general you have to sell it. Talk to your broker. He may buy it for $1 or something like that to help you out. Back in my salad days I bought a stock (fortunately not for much) that paid a relatively huge dividend. It paid for a couple more quarters, then slashed the dividend, then declared bankruptcy. The stock did a 1 for 100 reverse split, most of the stock went to the bondholders, and the company was reorganized. Subsequently it has done quite well, and my 3 shares are worth about half of what I paid for the original 300. The fact I still own it is partly based on the fact it is in an IRA, where I couldn't claim any capital loss anyway, plus the broker wouldn't do anything, and if I sold the 300 shares at 1/32 during the bankruptcy proceedings I'd have gotten less than the commission for selling it! So you wait and hope, or you somehow sell it. Best wishes, Chris
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