have a handful of 0 value stocks in my portfolio and have to pay a MANDATORY REORGANIZATION FEE whenever there is a merge. Is it legal for the company to charge such fee. What can I do to avoid that.
2006-07-13 11:45:09 · 3 answers · asked by John J 1 in Business & Finance ➔ Investing
Telephone your broker and ask about dumping the worthless stock. Most brokers will buy the shares for $1 total for the group. Pick your year to get the most from the tax write off.
2006-07-13 12:45:22 · answer #1 · answered by cyclist 3 · 0⤊ 1⤋
When you have a stock that's worth very very little, like $0, it's considered worthless. To sell a worthless stock, you'll need to contact your broker and let him or her know that you want to sell. Generally, you'll get about a dollar for the entire thing, but then on the positive side, you'll be able to write it off on your taxes as a loss.
The KEY is that the stock has to be considered worthless. Just because it's down to say a penny doesn't automatically mean that's worthless. To be worthless, the firm has to determine that the company is "out of business" and not coming back.
Perfect example, years ago when I worked as a broker, the company Unisys dropped from $15 down to around $5. Some might say "It's worthless" because $5 compared to 15 is nothing. But the stock wasn't worthless and eventually came back up.
There are plenty of penny stocks as they're called which are not worthless. So your broker must consider them worthless in order for you to sell. If they've been at 0 for quite a while, they're most likely worthless.
2006-07-15 12:36:47 · answer #2 · answered by msoexpert 6 · 0⤊ 0⤋
Don't.
2006-07-13 18:48:03 · answer #3 · answered by Anonymous · 0⤊ 0⤋