The National Directory of Certified Public Accountants

Ask A CPA - Capital Gains & Losses

Worthless Stock - Bad Debt Deduction?

If you own securities and they become totally worthless, you can take a deduction for a loss, but not as a bad debt. The worthless securities are treated as capital assets sold on the last day of the tax year. Report worthless securities on IRS Form 8949 and Schedule D.

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