Non-Transferable Security

[peggysioux]

Taxpayer received notice from Charles Schwab stating they are removing non-transferable position from taxpayer's account. This security has been identified as subject to the "destruction of non-transferable securities certificate program". I would think that this implies securities are now worthless. However, statement also says "if corporation that issued the security reestablishes a transfer agent, Charles Schwab will use reasonable efforts to work with depository to have the destroyed certificates replaced and returned to account." Would other tax preparers deem securities as worthless?

[Koss]

Non-transferable?

That's pretty weird...

I've never seen the term non-transferable used in that context.

But there's an awful lot of other things I've never seen.

I'm just not convinced that it is synonymous with worthless, for purposes of a capital loss.

What company issued the securities? Was there some sort of merger or buyout, in which your client received shares of the new company, and the old company's shares stopped trading?

If something like that happened, then the securities in question may in fact be worthless, but I don't see how the taxpayer would have a capital loss, because whatever basis he had in those shares has been resurrected in the shares of the new company...

Need more information.

Talk to Chuck. [LMAO]



BMK