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Tax question regarding stocks. WWYD?
Posted on 12/26/13 at 8:50 am
Posted on 12/26/13 at 8:50 am
I sold some stocks this year that I have been holding for a while and am currently looking at having to pay taxes on ~$15,000 that I made. During a restructuring deal through Forest Oil, I acquired 324 shares of a company called Lone Pine Resources that is currently bankrupt. The stock was worth ~$4,000 @ $15.24 / share. It is now at $0.0070 / share for a total of $2.27! Would TD sell this stock to lower the tax burden for the year or hold onto it and hope something comes from nothing? Thanks
**Oh and I am going to ask my financial advisor what I should do but I just want to make sure he leads me in the right direction.
**Also, I have never used a CPA but I think I will after this year (sold stocks, bought a double, etc). Any recommendations in the NOLA area?
**Oh and I am going to ask my financial advisor what I should do but I just want to make sure he leads me in the right direction.
**Also, I have never used a CPA but I think I will after this year (sold stocks, bought a double, etc). Any recommendations in the NOLA area?
1
Posted on 12/26/13 at 8:58 am to Tigerstudent08
quote:
During a restructuring deal through Forest Oil, I acquired 324 shares of a company called Lone Pine Resources that is currently bankrupt. The stock was worth ~$4,000 @ $15.24 / share. It is now at $0.0070 / share for a total of $2.27!
It doesn't matter what it was worth - it matters what your cost basis is going to be - you can't write off other people's losses - as a general rule, anyway.
The only other question I would have would be whether or not there is any potential gain in this stock? If so, you could sell it on the last trading day of the year, then re-buy it on the first trading day of 2014. Locks in your loss - now, while you need it, and preserves your participation in any future possible gain (heck you can buy back in at $3.00 and increase your position-
)Posted on 12/26/13 at 9:08 am to Ace Midnight
quote:No, don't do that.
sell it on the last trading day of the year, then re-buy it on the first trading day of 2014.
If he does that his sale on 12/31 would be a 'wash sale' and the IRS would disallow taking a loss on it. He has to wait a minimum of 30 days to repurchase the stock in order to be able to take the loss in 2013.
And for the OP, if a company goes into bankruptcy, even if the company emerges from bankruptcy, the current stock holders are usually left with nothing. Sell, take the loss and reduce your tax burden.
Posted on 12/26/13 at 9:16 am to LSURussian
quote:
He has to wait a minimum of 30 days to repurchase the stock in order to be able to take the loss in 2013.
Yeah, little details like that slip my mind when I give off-the-cuff advice like this.
quote:
And for the OP, if a company goes into bankruptcy, even if the company emerges from bankruptcy, the current stock holders are usually left with nothing. Sell, take the loss and reduce your tax burden.
That's solid - take the loss now when you can use it and it has definite value.
(But, remember, cost basis will determine your capital loss.)
Posted on 12/26/13 at 9:20 am to Ace Midnight
quote:Unfortunately, I've had so much experience taking losses that I know that wash sale rule very well.
little details like that slip my mind when I give off-the-cuff advice like this.
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