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  1. #1

    Default IRA Holds Shares of Company in Bankrupcy

    A company in my IRA is going bankrupt. I was sent a form for making a claim before court 8/25. My research indicates I will receive less shares and they will be worth less. Is it worthwhile to file a claim? What should my claim be if I do file? Can I deduct this loss on my taxes? Thanks, Tomato

  2. #2
    Join Date
    Oct 2006
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    Default Re: IRA Bankrupcy

    Quote Quoting yousaytomato
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    A company in my IRA is going bankrupt. I was sent a form for making a claim before court 8/25. My research indicates I will receive less shares and they will be worth less. Is it worthwhile to file a claim? What should my claim be if I do file? Can I deduct this loss on my taxes? Thanks, Tomato
    Since you did not pay tax on the money that went into the IRA, you cannot take a deduction for the capital loss.

    As far as making a claim is concerned, yes you should probably do that. Whether or not its worthwhile cannot be determined by the info you have provided, but its probably wise to do so anyway.

  3. #3

    Default Re: IRA Bankrupcy

    Quote Quoting llworking
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    Since you did not pay tax on the money that went into the IRA, you cannot take a deduction for the capital loss.

    As far as making a claim is concerned, yes you should probably do that. Whether or not its worthwhile cannot be determined by the info you have provided, but its probably wise to do so anyway.
    Upon further research, the company appears to be in my individual account.

    It is still listed, and appears to be down $9,385. Is this the amount I can claim? Will I be able to take a deduction since it is not in an IRA?

  4. #4
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    Default Re: IRA Bankrupcy

    Claimable capital losses are limited to $3,000 plus any offsetting capital gains.

  5. #5
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    Default Re: IRA Bankrupcy

    Quote Quoting Scott67
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    Claimable capital losses are limited to $3,000 plus any offsetting capital gains.
    That's not entirely correct.

    Capital losses offset capital gains. If there are no capital gains to offset, then losses can be claimed up to $3000.00 per year until the entire losses is used up.

    So, if you have a capital loss of 9k in 2009, and no capital gains to offset, then you can take a 3k loss in 2009, 2010, and 2011.

  6. #6
    Join Date
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    Default Re: IRA Bankrupcy

    Quote Quoting llworking
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    That's not entirely correct.

    Capital losses offset capital gains. If there are no capital gains to offset, then losses can be claimed up to $3000.00 per year until the entire losses is used up.

    So, if you have a capital loss of 9k in 2009, and no capital gains to offset, then you can take a 3k loss in 2009, 2010, and 2011.
    Yes, of course, you are right. Thanks for the correction.

  7. #7
    Join Date
    Nov 2007
    Posts
    28

    Default Re: IRA Holds Shares of Company in Bankrupcy

    The fact that the stock is "down" does not make the unrealized loss deductible. The fact that the company filred for bankruptcy does not make the "loss" that has not been realized, nor has the loss become fixed and determinable, so that it would be deductible. More information is needed before a loss deduction would be advised. If there is ANY hope at all of some recovery then the loss is NOT fixed and determinable and therefor not yet deductible.

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