I have lost 90% of my investment in a certain stock, can I sell the rest and write if off?

Question

I bought some stocks in 2005. If I sell them today, I will have lost 90% of my investment. I need a tax write off and was wondering if this is a good idea? If you want to know if the stock is going to rebound the answer is no. It will probably lose all of its value in the next couple months. Thanks for the help.

Answer 1

If you sell it now, the loss is a capital loss and would be deductible to a limit of $3,000 per year ($3,000 in excess of any other capital gains you may have). If you hold onto it and it becomes worthless (i.e. the stock is delisted and you will have no way to recoup any of your investment in it), it will still be treated as a capital loss, still subject to the limitations above.

So really the question is if you want to get out now and get at least 10% of your investment back, or wait and lose the remaining 10%.

Answer 2

I think you can write off up to $3000, check with an accountant. You should have sold the stock the minute you realized it was not a good investment. Praying and hoping for a rebound of a bad stock rarely works and usually costs you a lot more money.

Answer 3

The maximum write-off per tax year is $3000, but you can carry over that loss for as long as it takes to eat up $3000 in losses per year. If you lose $21000 on selling this stock, you can carry $3000 of losses as a write off per year for the next 7 years to help offset any gains when selling stock winners (assuming you've sold any winning stocks).

Answer 4

I'm not sure what you mean by "write it off." You can sell it at a loss, with the tax loss the difference between what you paid for it and what you sold it for. This will be a short-term or long-term capital loss deoending on how long you held the shares. The loss can be applied against your income from other sources up to a point, or against capital gains income up to a point. You cannot write off the entire investment as long as there is a buyer for your shares.

Answer 5

And you've still got some? Where have you been? Botswanna?

If its not going to rebound, then sell it. Better something than nothing. I've got two stocks still on my books right now because there was so little news on them that I didn't realize what was wrong--the public hype said things were great, but the public hype was wrong. So it will cost me more to sell them, if there is a buyer anywhere. If you already know their fate, kill them as you should have long, long ago.

Answer 6

Yes, if you sell the stock you can take a capital loss deduction on your taxes.

If you think the stock will lose the rest of its value, you should sell regardless of the tax benefits!

Answer 7

yes you can write it off however only 3000.00 per year.Max allowable in losses on schedule D line 13 1040
just need dates purchased if various put various
price paid and dates sold and price of proceeds
Sell before last business day in 06 or you wont get it until next year.

Answer 8

Living example why you need to do your homework and follow your investments. Also shows that if you aren't willing to do those simple things you need to at least use a stop loss.

Answer 9

you're allowed as much as a $3,000 internet loss. Your take you features and the subtract your losses - in case you finally end up with a loss greater advantageous than 3k you would be waiting to deduct it in years yet to come. So in case you happened to have,say $8,000 in features and this $12,000 loss, your internet loss could be $4,000. you could deduct $3k this year and use the extra $1k next year.

Answer 10

You've already lost 90% of your investment.