When Should a Loss on Sale of Stock Be Taken?

#13 10-19-2004, 02:49 PM

Al Smith <ecarecar[at]yahoo.com> wrote:
- quote -

> "Phil Marti" <philmarti[at]aol.com> wrote:
> > "Al Smith" <ecarecar[at]yahoo.com> writes:

> > > In October of 1987 I paid $3,850 for shares of a Canadian
> > > gold mining company. They never paid a dividend, and I had
> > > forgotten about the stock. This month I found the
> > > certificate. The transfer agent says the company was
> > > purchased by another company for $1.55 per share (286
> > > shares).
> > > > > In what year would a loss be deductible?

> > The year of the sale.

> What sale?

If the company was purchased and cash given to the
shareholders, that counts as a sale. (If it was a
stock-for-stock transaction, that doesn't; the basis carries
over.)

The date to use is the date on which the cash was available
to the shareholder, even if you failed to receive it then
("constructive receipt").

Seth

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#12 10-18-2004, 04:19 AM

- quote -

> > In October of 1987 I paid $3,850 for shares of a Canadian
> > gold mining company. They never paid a dividend, and I had
> > forgotten about the stock. This month I found the
> > certificate. The transfer agent says the company was
> > purchased by another company for $1.55 per share (286
> > shares).

> If they paid cash for the shares, your money should be
> sitting in an unclaimed property ofice either in your state
> or in the relevant Canadian province (if they have similar
> unclaimed property laws). If it was an exchange of shares,
> you would need to tender your shares to get the shares of
> the new company. so it isn't necessarily worthless until you
> do some digging.

No, they are not worthless. They are worth 1.55 x 286
dollars. But, that will be a 3,850 - (1.55 x 286) dollar
loss.

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#11 10-18-2004, 04:19 AM

"Herb Smith" <smithff33[at]aol.com> wrote:
- quote -

> "Al Smith" <ecarecar[at]yahoo.com> wrote:

> > In October of 1987 I paid $3,850 for shares of a Canadian
> > gold mining company. They never paid a dividend, and I had
> > forgotten about the stock. This month I found the
> > certificate. The transfer agent says the company was
> > purchased by another company for $1.55 per share (286
> > shares).
> > > In what year would a loss be deductible?

> A LOSS is claimed in the year you sell the shares, however
> your figures indicate that you will have a GAIN if sold at
> $1.55 per share.

Really! Cool.

Hey, I'll sell them to you for just $3,000.

-------------------------------
Moderator: 286 * 1.55 = $443.30
-------------------------------

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#10 10-18-2004, 04:19 AM

"Phil Marti" <philmarti[at]aol.com> wrote:
- quote -

> "Al Smith" <ecarecar[at]yahoo.com> writes:

> > In October of 1987 I paid $3,850 for shares of a Canadian
> > gold mining company. They never paid a dividend, and I had
> > forgotten about the stock. This month I found the
> > certificate. The transfer agent says the company was
> > purchased by another company for $1.55 per share (286
> > shares).
> > > In what year would a loss be deductible?

> The year of the sale.

What sale?

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#9 10-18-2004, 03:41 AM

philmarti[at]aol.com (Phil Marti) wrote:
- quote -

> smithff33[at]aol.com (Herb Smith) writes:

> > > In October of 1987 I paid $3,850 for shares of a Canadian
> > > gold mining company. They never paid a dividend, and I had
> > > forgotten about the stock. This month I found the
> > > certificate. The transfer agent says the company was
> > > purchased by another company for $1.55 per share (286
> > > shares).
> > > > > In what year would a loss be deductible?

> > A LOSS is claimed in the year you sell the shares, however
> > your figures indicate that you will have a GAIN if sold at
> > $1.55 per share.

> Time for remedial math class, Herb. 286 shares at $1.55/sh
> is less than $450, which would be a loss with this set of
> facts.

Ah yes, the dreaded "decimal point shift"! I've got to stop
using that old slide rule to do these calculations :-)

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#8 10-18-2004, 03:02 AM

Herb Smith <smithff33[at]aol.com> wrote:
- quote -

> "Al Smith" <ecarecar[at]yahoo.com> wrote:

> > In October of 1987 I paid $3,850 for shares of a Canadian
> > gold mining company. They never paid a dividend, and I had
> > forgotten about the stock. This month I found the
> > certificate. The transfer agent says the company was
> > purchased by another company for $1.55 per share (286
> > shares).
> > > In what year would a loss be deductible?

> A LOSS is claimed in the year you sell the shares, however
> your figures indicate that you will have a GAIN if sold at
> $1.55 per share.

Huh?

He paid $3,850. He received $1.55 * 286 = $443.30; that
looks like a loss of $3406.70 to me. (If those numbers are
for different currencies, the actual loss will differ.)

Seth

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#7 10-15-2004, 01:07 AM

smithff33[at]aol.com (Herb Smith) writes:

- quote -

> > In October of 1987 I paid $3,850 for shares of a Canadian
> > gold mining company. They never paid a dividend, and I had
> > forgotten about the stock. This month I found the
> > certificate. The transfer agent says the company was
> > purchased by another company for $1.55 per share (286
> > shares).
> > > In what year would a loss be deductible?

> A LOSS is claimed in the year you sell the shares, however
> your figures indicate that you will have a GAIN if sold at
> $1.55 per share.

Time for remedial math class, Herb. 286 shares at $1.55/sh
is less than $450, which would be a loss with this set of
facts.

Phil Marti
Clarksburg, MD

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#6 10-14-2004, 09:22 AM

Al Smith <ecarecar[at]yahoo.com> wrote:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

In the year you constructively received the 1.55 which is
probably the year of the conversion and payment.

You have 7 years to amend your tax return for the year you
discover this loss.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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#5 10-14-2004, 09:03 AM

"Al Smith" <ecarecar[at]yahoo.com> writes:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

In the year you sell the stock. If you sell it at a loss,
this year, you would deduct it on this year's return. If
your total losses exceed $3,000, you would deduct $3,000 on
this year's return and carry over any balance to future
years.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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#4 10-14-2004, 08:44 AM

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).

If they paid cash for the shares, your money should be
sitting in an unclaimed property ofice either in your state
or in the relevant Canadian province (if they have similar
unclaimed property laws). If it was an exchange of shares,
you would need to tender your shares to get the shares of
the new company. so it isn't necessarily worthless until you
do some digging.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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#3 10-14-2004, 08:44 AM

"Al Smith" <ecarecar[at]yahoo.com> wrote:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

When you sell the stock.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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#2 10-14-2004, 08:25 AM

Al Smith" <ecarecar[at]yahoo.com> wrote:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

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#1 10-14-2004, 07:47 AM

"Al Smith" <ecarecar[at]yahoo.com> writes:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

The year of the sale.

Phil Marti
Clarksburg, MD

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10-14-2004, 07:28 AM

"Al Smith" <ecarecar[at]yahoo.com> wrote:

- quote -

> In October of 1987 I paid $3,850 for shares of a Canadian
> gold mining company. They never paid a dividend, and I had
> forgotten about the stock. This month I found the
> certificate. The transfer agent says the company was
> purchased by another company for $1.55 per share (286
> shares).
> In what year would a loss be deductible?

A LOSS is claimed in the year you sell the shares, however
your figures indicate that you will have a GAIN if sold at
$1.55 per share.

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#-1 10-11-2004, 04:21 AM

In October of 1987 I paid $3,850 for shares of a Canadian
gold mining company. They never paid a dividend, and I had
forgotten about the stock. This month I found the
certificate. The transfer agent says the company was
purchased by another company for $1.55 per share (286
shares).

In what year would a loss be deductible?

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