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stock in bankrupt company

by Bryan
(Cincinnati, OH)




I have some shares of Fairpoint Communications as a spin-off from Verizon. They filed for bankruptcy quite some time ago, but at what point can I finally write off the cost basis as a loss and wipe my hands of this?




Comments for
stock in bankrupt company

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Aug 19, 2010
 Stocks Simplified Writes
by: Shaun

That depends, if the company filed something like Chapter 11 bankruptcy and they are going to reappear then you haven’t lost anything and can’t write it off as a loss.

However if the company is just gone then you should be able to write it off on your taxes as a 100% loss. In other words you bought the stock at whatever price it is at and sold it at $0. When you do your taxes you should be able to write it off.
Aug 19, 2010
 web site with more info
by: Bryan

After further research on this I found the following site that pretty much lays it all out.

http://www.sec.gov/investor/pubs/bankrupt.htm

Fairpoint Communication filed Chapter 11, so it looks like I wait it out for the reorganization plan approval, which has been delayed. Apparently they will inform me what happens once that plan is approved and implemented.

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