Laurie,

Our club took a gamble and invested in a company that went bankrupt and is no longer being traded (Sabine Oil & Gas, SOGC).  I recieved a letter from a US Circuit Court that we cannot sell our defunct shares.  How do we report this on our taxes?  Do we just show what we put into it as a loss or are we still technically shareholders?  Any assistance or advice would be appreciated.

Thanks!

Jeff

Treasurer 

WTF, Winnebago Trust Fund, LLC

I can't find any evidence that the shares cannot trade. They are currently listed on the "pink sheets" at $0.02/share. The company is currently in Chapter 11 bankruptcy which allows management time to restructure the corporate debt while maintaining operations. Some companies cancel their existing common stock as a part of their restructuring, but others do not. Until such time as the bankruptcy court declares the common stock canceled/worthless, your only option is to try and sell the stock. Some brokers will make a courtesy trade, buying the shares from you for $0.01 so you can realize the loss.