Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-24-2010, 01:28 PM
Junior Member
 
Join Date: Feb 2010
Posts: 1
Talking espp loss

Can I deduct the losses on purchase of $13,000 of securities from my Company that I work for, that has filed for bankruptcy? How do I report these losses and how much can I deduct?

Thanks..


Last edited by TaxGuru : 02-26-2010 at 01:16 PM.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-26-2010, 09:56 AM
Junior Member
 
Join Date: Feb 2010
Posts: 4
unrealized loss

Unless you sold your holdings, you cannot claim a loss
At this point it sounds as though you have an unrealized loss...at the time you liquidate...or sell your holdings you may realize that loss. There are limits on how much you can deduct each tax year, but these are considered capital losses and you will need to itemize in order to claim them. I would consult a financial advisor before making any decision to liquidate your current holdings though.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 02-26-2010, 01:17 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
Yes, you can deduct the entire loss of $13,000 on Schedule D. You should indicate that the stock is worthless. There is an option available in the software program to indicate that the Security is Worthless.

So, on Scheduel D. the sale price indicated would display as "Worthless", whereas the cost basis would be $13,000.

But, remember, you are only entitled to deduct a maximum of $3,000 of capital losses in any given tax year, with the balance carried over for future use to be either offset against future potential capital gains or deduct another $3,000 of capital losses with the balance carried over for future deductions.

Here are both instructions to Schedule D and an actual copy of the Form Schedule D. I am sure that you will gain additional insight into this form by clicking on the 2 links below.

http://www.irs.gov/pub/irs-pdf/f1040sd.pdf (Actual Form)
http://www.irs.gov/pub/irs-pdf/i1040sd.pdf (Instructions)

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
$25,000 loss--does the deduction have to be taken? traveldana Rental Real-Estate 0 04-14-2009 03:48 PM
Hurricane Ike casualty loss Nazar Abazajian Miscellaneous 1 03-01-2009 10:55 PM
Hurrican Ike Loss paul riley Itemized Deductions 1 02-01-2009 03:53 PM
Tax loss harvesting bruces Capital Gains 1 11-26-2008 10:36 AM
ESPP related tax question..(and covered calls) 6781 Capital Gains 0 03-26-2008 12:19 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.