Can I take a loss on this year’s taxes if I bought a penny stock from a company that went bankrupt years ago and the stock is still listed in my account?

by Shane R. Fisher, CPA | Jan 11, 2019

I bought a penny stock in 2004 from a company that went bankrupt in 2010. It’s still listed in my account with zero value. Can I take a loss on this year’s taxes?

For the stock of a company that is determined to be worthless with a zero value, you can take the loss in the current year since you have not previously taken the loss. As long as you haven’t recognized the loss before, you are able to take the loss in the year determined the stock is worthless. You will need to fill out Schedule D for the Form 1040. Under the sales price column it should be noted that the stock sales price is worthless. You would enter the last day of the year as the sale date. You will also need to check the box that you did not receive a 1099-B to cover the transaction.

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Answered by: Shane R. Fisher, CPA, is vice president of finance at TriCorner Homes in Harrisburg, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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