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#2
02-24-2009, 11:16 PM
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 Re: 401K based on company stock steve-o wrote: - quote - > On Feb 24, 12:29 pm, Alan <sfcnm-...[at]yahoo.com> wrote:
accounts the amount received is less than your cost basis. You> > B Greene wrote: > > > Client has 540 shares of company stock in her 401K worth about $25,000. > > > Company takes easy way out, the big B (Bankruptcy) and declares all stock > > > worthless. Other than SOL, is there any other way to handle this? > > If the 401(k) plan still exists: SOL. > > > If the 401(k) plan no longer exists and client had no cost basis: > > SOL. > > > If the 401(k) plan no longer exists and client had a cost basis > > (made after-tax contributions): Schedule A Misc. Itemized > > Deduction subject to 2% AGI limitation for the loss of cost basis. > Isn't this the same as buying any stock or mutual fund > ina 401k, or an IRA? you can't write off the loss? > If you can write off losses in an IRA or 401k I'd be surprised > regardless of whether it's company stock or not. same treatment?? You can write-off a loss in an IRA if after closing all your IRA would only have a cost basis if at some point in time you either made a nondeductible contribution or you rolled over a tax-deferred retirement account that had a cost basis. This same rule holds for Roth IRAs. You would only have a cost basis in a tax-deferred retirement account such as a 401(k), if you were allowed to make after-tax contributions. In many companies, highly compensated individuals, as defined by Section 401(k)(5), have the ability to make after-tax contributions. If after closing the 401(k) by taking a lump-sum distribution in cash, you receive less than your cost basis, you have a deductible loss. -- << ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- > |
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#1
02-24-2009, 10:33 PM
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| Re: 401K based on company stock On Feb 24, 12:29*pm, Alan <sfcnm-...[at]yahoo.com> wrote: - quote - > B Greene wrote:
Isn't this the same as buying any stock or mutual fund> > Client has 540 shares of company stock in her 401K worth about $25,000. > > Company takes easy way out, the big *B (Bankruptcy) and declares all stock > > worthless. *Other than SOL, is there any other way to handle this? > If the 401(k) plan still exists: SOL. > If the 401(k) plan no longer exists and client had no cost basis: > SOL. > If the 401(k) plan no longer exists and client had a cost basis > (made after-tax contributions): Schedule A Misc. Itemized > Deduction subject to 2% AGI limitation for the loss of cost basis. ina 401k, or an IRA? you can't write off the loss? If you can write off losses in an IRA or 401k I'd be surprised regardless of whether it's company stock or not. same treatment?? -- << ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- > |
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02-24-2009, 04:29 PM
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| Re: 401K based on company stock B Greene wrote: - quote - > Client has 540 shares of company stock in her 401K worth about $25,000. > Company takes easy way out, the big B (Bankruptcy) and declares all stock > worthless. Other than SOL, is there any other way to handle this? If the 401(k) plan still exists: SOL. If the 401(k) plan no longer exists and client had no cost basis: SOL. If the 401(k) plan no longer exists and client had a cost basis (made after-tax contributions): Schedule A Misc. Itemized Deduction subject to 2% AGI limitation for the loss of cost basis. -- << ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- > |
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#-1
02-24-2009, 04:16 PM
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| 401K based on company stock Client has 540 shares of company stock in her 401K worth about $25,000. Company takes easy way out, the big B (Bankruptcy) and declares all stock worthless. Other than SOL, is there any other way to handle this? -- << ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- > |
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