Bankrupt Corporation

Linda on

Ask your brokerage company how they will handle the bankruptcy. It helps if they show it on the year-end 1099-B statement. Sometimes they will show it as a sale for a penny. If they don't report it they should remove it from your portfolio and you can simply enter a sale in Bivio with zero sale price. You may have to put in a penny for sale price if a zero won't work. You can always adjust another sale price by a penny to balance the account. Use the date of the bankruptcy as the sale date.

Linda

Pointe Players

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------

From: jnauwtf <jnauwtf@gmail.com>

Date:10/23/2015 4:19 PM (GMT-05:00)

To: club_cafe@bivio.com

Cc:

Subject: [club_cafe] Bankrupt Corporation

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

Happy Connecting. Sent from my Sprint Samsung Galaxy S(R) 5 Sport

Laurie Frederiksen on

When a company files for bankruptcy, its shares are typically delisted from the major exchanges as it moves through the bankruptcy reorganization process. They are not worthless, but they may not be worth much.

Many companies eventually cancel their outstanding stock when the bankruptcy is finalized. That is the point when the shares become worthless and you can write them off, but this can take several years.

You can't write them off until the bankruptcy has been approved by the court and the shares are declared worthless.

Until then, you own a stock with little value that will make your club record keeping a bit harder because you'll have to update its price manually.

If you want to keep things simple, you'll probably want to have your broker sell the shares you have ASAP so you can remove them from your records.

Laurie Frederiksen
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