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Disposition Of Lehman Brothers Shares

Two years ago, I was fortunate to be able to purchase shares of a new limited edition Lehman Brothers preferred stock.

My luck ran out when Treasury Secretary Paulson -- no doubt having seen my name on the shareholder list -- decided that Lehman must go down.

I know from reading these hallowed pages that the shares must be sold in order to establish a tax loss. The question is: Does the nature of the sale matter so long as it is at the then current market price -- now $.01 per share (vs $25 cost)? Can it be to a family member or must it be "arms length"? The shares are held by a broker in the name of my revocable trust. I would prefer to not increase the loss by way of paying a commission out of pocket.

Thank you for your help.

Tearfully,

Bill

Reply to
William Brenner
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Consensus reply regarding the sale of bankrupt companies like this was that most brokers will sell as a courtesy and you won't pay a commission beyond the sale. I learned this the hard way after the netcom bubble of

1999-2001.

Joe

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Reply to
JoeTaxpayer

The sale must be to an unrelated party. Losses on sales to related parties cannot be recognized on the seller's tax return.

Reply to
Bill Brown

Shares need not be sold if the Bankruptcy Court states they're worthless.

Reply to
D. Stussy

TOTALLY worthless securities do not have to be sold--you just enter them on Schedule D as having been sold on the last day of the year.

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Reply to
Brew1

Joe gave you correct guidance. I join you in tears, for my considerable investment in WAMU went down the drain this year, after the bank was taken over by FDIC.

I can verify that my broker considerately sold the (worthless) shares to some arbitrageur for the about 6 cents/share, and did not charge any commission. (After all, they did collect a significant commission for the purchase.)

Bill

Reply to
Bill

This close to the end of the year, I wonder if it would be possible to wait for next January to take the loss - if you might benefit from that delay. If for some reason you found that you were unable to make the disposition in January, then it would just go down on your 2008 filing (not due until April).

Reply to
dapperdobbs

So often I have made the offer to buy shares of worthless securities, i.e.,

Reply to
Dick Adams

How does one determine whether such is the case?

Reply to
William Brenner

It will be published in a document by the Court.

Reply to
D. Stussy

Lehman stock is still trading. If you don't sell it this year, you don't get to take a loss this year (even if you want to).

Seth

Reply to
Seth

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