club_cafe: we would like an exodus from exodus

iras1 on

You're not going to like this. Exodus Communications common stock was cancelled in June, 2002. You should have claimed the loss on your 2002 Form 1065 and distributed the loss to your partners at that time. Here's what you need to do.

Enter a sale of Exodus, dated 12/31/02 for $0. This will create the loss and remove the stock from bivio. Rerun your Form 1065 and Schedule K-1s (and corresponding state return(s), if any). Remember to check boxes G(5) on Form 1065, page 1 and I(2) on each Schedule K-1. Each of your partners may have to file amended personal income tax returns as well.

Legally, you cannot claim the loss in 2003, but I have no idea what the likelihood is that if you did so (rather than amending 2002) it would be caught by the IRS.

Ira Smilovitz

In a message dated 09/09/03 12:31:33 PM Eastern Daylight Time, lric@bivio.com writes:

We, most unfortunately, hold stock in Exodus Communications
which, to the best of my knowledge has been declared
worthless. If this is so, what if any actions do we take
with respect to club accounting? Thanks in advance!

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