Handling of GM stock

If you can get your broker to buy it back from you, even for $0, that is better than just declaring it worthless.

Steve

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GM is still traded on the stock market at a very low price, so if you want to take the loss, sell the stock.

If it were to be treated as worthless, you would write "WORTHLESS" instead of $0.00.

might think a stock worth $0.005 but would cost you $20 would beworthless. However the IRS is said not think that way.

Your best bet may be to sell the stock, if your broker gives you a deal. Many will reduce the commission so that you don't actually come out net negative on the sale. Many won't. I suggest you ask your broker.

Isn't there an old GM and a new GM (which may just be the same old thing, but that a different matter . . .)?

The old GM may or may not be worthless. It has some assets the new GM didn't want, and presumably has a lot of tax losses on the books. There may be some value remaining in the old GM, which may take some time to play out. Or, it may ultimately prove to be worthless. Is it still selling? if so, you would need to sell it to take the loss. Has it gone completely kaput, and is truly worthless? I don't think so yet, but if and when it does, you can treat it as a sale with a sales proceeds of zero on that date.

If you sell all the stock at once, you can aggregate all long term on one line of schedule D and all short term on one line.

Not necessary. This is due to bankruptcy.

Add the word "bankrupt" in the description field. The "sales" date should match the Bankruptcy Court's decision date.

I don't understand why this helps?

Many companies declare bankruptcy, and the original stock emerges with value.

General Motors Corp. (GMGMQ) trades at $1.15 bid, $1.16 asked (right now). So it's far from worthless (though it's likely a loss; it was over $40 in late 2007).

Once you sell it, yes.

Once you sell it, like any other sale.

The sale price will be higher than that.

(If it were worthless, I think somebody here offered to buy such positions for $1, so you'd have an actual sale done at arm's length.)

Provided they're all long-term, you can aggregate them. Use VAR-L for the purchase date.

Seth

Report the OLD GM stock on Schedule D as being sold on December 31,

2009 which is the last day of the year in which the stock became worthless. Your total loss will be your total basis in that GM stock.

[snip]

Old GM now trades under the symbol MTLQQ. Regulators ordered the name (Motors Liquidation Corp.) and symbol to be changed to avoid confusion by traders. Last trade was at 55 cents.

As has been mentioned, it's not worthless if it trades for 55 cents. To take the loss, sell the shares.

In which case he has no writeoff at all, so what's the problem?

You implied the "worthless" is due to bankruptcy, which is not necessarily the case. Entering Bankruptcy in the field description could lead an examiner to look even more closely, since it could be you think just being bankrupt leads to worthlessness.

I did not! The OP, who HAS GM stock, said it was (presumed) worthless. A CH 11 BK can make that so. His question was how to report it. I told him.

And this is why i am of the old school: "never complain; never explain." Why invite audit? (grin

ChEAr$, Harlan Lunsford, EA n LA