Larger Losses and Taxes

[leighb]

Sooo....

I've inherited a messy stock portfolio full of penny stocks. I've done my best to turn them into securities that I understand with more controllable risks. But that's another story.  Regardless, some of the shares have gone down to zero, so I can write them off as a total loss. Here's the deal. I've lost many times more than my total yearly income. I haven't written them off yet, since I don't really understand the tax implications.

Do I or should I consult a tax expert in this situation? In years past I've used turbo-tax easily enough to account for my rental income and capital gains. I'm use to dealing with losses that do not get carried over (I'm not sure if that's the correct term here.)


Thanks,

[geekette]

Your basis in the stock is what they were worth on the day the decedent died.  Have they gone to zero since then?

[leighb]

Yes

[MDM]

...I've lost many times more than my total yearly income. I haven't written them off yet, since I don't really understand the tax implications.

Do I or should I consult a tax expert in this situation?

Given the size of the potential write-off: yes, for at least one year's return, maybe two.  After that, assuming you have the expert explain so you do understand, you should be able to do things on your own.