2017 $0 Stock

[spanel]

I have a client that their stock went to worthless in 2017. Approx $100,000.

Do I ament 2017-current with the 3000 loss each year to current?
(knowing no refunds for 17,18,19)

Or something else?

Thanks!!

Chris

[Rapid Robert]

Why bother with amending 2017-2019 with IRS? (sure, for your own records, but why file)? It'll just clog up the system.

Filing those three years does not benefit the taxpayer in any way. It does not prove that the the worthless stock capital loss deduction is legitimate, nor does it start any sort of SOL clocK. For any year that a cap loss carryforward is being claimed, they can always audit the historical event that generated it. So be sure to have the taxpayer keep good records until the $100K cap loss is used up or they die.

[New York Enrolled Agent]

Chris - check the special rule in IRC 6511(d) for worthless stocks. You should file the 2017 return to establish the loss and establish the basis for carry forwards and perhaps take advantage of the 7-year rule.

[Rapid Robert]

Thanx NYEA for the additional info and correction. I kind of remembered something along the lines of what you wrote, but when I checked TheTaxBook for "worthless stock" it made no mention of it, so that was not part of the basis of my reply (I did not research any further).