Handling of GM stock

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Subject Author Date Handling of GM stock Michael Stemper 07-14-2009   Re: Handling of GM stock Steve Pope 07-14-2009  Re: Handling of GM stock D. Stussy 07-14-2009  Re: Handling of GM stock Arthur Kamlet 07-14-2009  Re: Handling of GM stock D. Stussy 07-16-2009  Re: Handling of GM stock Arthur Kamlet 07-16-2009  Re: Handling of GM stock D. Stussy 07-16-2009  Re: Handling of GM stock HLunsford 07-27-2009  Re: Handling of GM stock Diogenes 07-14-2009  Re: Handling of GM stock Arthur Kamlet 07-14-2009  Re: Handling of GM stock DF2 07-14-2009  Re: Handling of GM stock Wallace 07-14-2009  Re: Handling of GM stock Seth 07-14-2009  Re: Handling of GM stock Alan 07-16-2009  Re: Handling of GM stock paulthomascpa 07-16-2009  Re: Handling of GM stock Bill Brown 07-14-2009
Posted by DF2 on July 14, 2009, 11:51 am Please log in for more thread options In misc.taxes.moderated, Michael Stemper wrote: >Presumably, the exit of General Motors from Chapter 11 has made (or is >about to make) my GM stock worthless. This looks like a capital loss >to my untrained eyes. > >How do I declare this on my US 2009 returns? Is it just treated as a >long-term transaction on the front of Schedule D? Do I just put down >my total basis as the purchase price and "$0.00" as the sale price? If it were to be treated as worthless, you would write "WORTHLESS" instead of $0.00. http://www.irs.gov/publications/p550/ch04.html#en_US_publink100010315 You might think a stock worth $0.005 but would cost you $20 would be worthless. However the IRS is said not think that way. > >If not, is there some special form to use, or what? Your best bet may be to sell the stock, if your broker gives you a deal. Many will reduce the commission so that you don't actually come out net negative on the sale. Many won't. I suggest you ask your broker. > >Marginally related to the above question: I was taking advantage of >the Dividend Re-Investment Program (DRIP). This means that I have a >number of purchases. Can I aggregate them, or does each one need to >be itemized individually? > -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Wallace on July 14, 2009, 11:51 am Please log in for more thread options > Presumably, the exit of General Motors from Chapter 11 has made (or is > about to make) my GM stock worthless. This looks like a capital loss > to my untrained eyes. > > How do I declare this on my US 2009 returns? Is it just treated as a > long-term transaction on the front of Schedule D? Do I just put down > my total basis as the purchase price and "$0.00" as the sale price? > > If not, is there some special form to use, or what? > > Marginally related to the above question: I was taking advantage of > the Dividend Re-Investment Program (DRIP). This means that I have a > number of purchases. Can I aggregate them, or does each one need to > be itemized individually? Isn't there an old GM and a new GM (which may just be the same old thing, but that a different matter . . .)? The old GM may or may not be worthless. It has some assets the new GM didn't want, and presumably has a lot of tax losses on the books. There may be some value remaining in the old GM, which may take some time to play out. Or, it may ultimately prove to be worthless. Is it still selling? if so, you would need to sell it to take the loss. Has it gone completely kaput, and is truly worthless? I don't think so yet, but if and when it does, you can treat it as a sale with a sales proceeds of zero on that date. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Seth on July 14, 2009, 5:30 pm Please log in for more thread options >Presumably, the exit of General Motors from Chapter 11 has made (or is >about to make) my GM stock worthless. General Motors Corp. (GMGMQ) trades at $1.15 bid, $1.16 asked (right now). So it's far from worthless (though it's likely a loss; it was over $40 in late 2007). > This looks like a capital loss to my untrained eyes. Once you sell it, yes. >How do I declare this on my US 2009 returns? Is it just treated as a >long-term transaction on the front of Schedule D? Once you sell it, like any other sale. > Do I just put down >my total basis as the purchase price and "$0.00" as the sale price? The sale price will be higher than that. (If it were worthless, I think somebody here offered to buy such positions for $1, so you'd have an actual sale done at arm's length.) >Marginally related to the above question: I was taking advantage of >the Dividend Re-Investment Program (DRIP). This means that I have a >number of purchases. Can I aggregate them, or does each one need to >be itemized individually? Provided they're all long-term, you can aggregate them. Use VAR-L for the purchase date. Seth -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on July 16, 2009, 9:35 am Please log in for more thread options Seth wrote: >> Presumably, the exit of General Motors from Chapter 11 has made (or is >> about to make) my GM stock worthless. > > General Motors Corp. (GMGMQ) trades at $1.15 bid, $1.16 asked (right > now). So it's far from worthless (though it's likely a loss; it was > over $40 in late 2007). > [snip] Old GM now trades under the symbol MTLQQ. Regulators ordered the name (Motors Liquidation Corp.) and symbol to be changed to avoid confusion by traders. Last trade was at 55 cents. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by paulthomascpa on July 16, 2009, 9:58 am Please log in for more thread options > Seth wrote: >>> Presumably, the exit of General Motors from Chapter 11 has made (or is >>> about to make) my GM stock worthless. >> >> General Motors Corp. (GMGMQ) trades at $1.15 bid, $1.16 asked (right >> now). So it's far from worthless (though it's likely a loss; it was >> over $40 in late 2007). >> > > [snip] > > Old GM now trades under the symbol MTLQQ. Regulators ordered the name > (Motors Liquidation Corp.) and symbol to be changed to avoid confusion by > traders. Last trade was at 55 cents. As has been mentioned, it's not worthless if it trades for 55 cents. To take the loss, sell the shares. -- Paul Thomas, CPA www.paulthomascpa.com -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Question re: bad handling of 401k May 8, 2007, 12:52 am Inherited Annuity Taxability and Handling April 13, 2007, 11:48 pm Handling Personal Income Taxes Through Bankruptcy April 27, 2009, 3:51 pm Tax handling for Enron class action law suit recovery?? 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