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Stock Advisor launched in February of Penney Company, Inc. Prev 1 Next. This doesn't affect the value of your investment, but it gives you fewer shares in a company. The main contrast between an OTC stock and a stock on a major exchange is that your broker is less likely to deal with an OTC stock. That isn't to say that they won't, but some brokers don't offer OTC stocks.
If you want to keep a stock that has been delisted, you'll need to work with a broker that offers OTC trading. Even if your brokerage doesn't deal in OTC stocks, you will likely have the chance to sell or convert your shares when the company is delisted. Your broker may also set a date that the stock can be sold or converted using its services. If the company is delisting because it is going private, you'll probably get a buyout offer from the issuer. If you don't accept the offer, your share will lose its value when the company is delisted.
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Table of Contents. Definition and Example of a Delisted Stock. Your broker-dealer is responsible for ensuring the proper settlement of the trade. Method 3. Find out the company's status. If the delisted shares are for a company that has gone out of business, or is in liquidation status, you may be able to write off the shares as a loss on your taxes without selling them first. However, if the shares are literally worthless or the company no longer exists, it would be impossible to sell your shares.
Talk to a tax professional about how to write off your shares as a loss on your taxes. You may not be able to claim the full dollar amount that you paid for them. Talk to your broker. Many brokers will buy worthless or nearly worthless stock from customers. That way you can easily get rid of the stock and get a trade confirmation for your tax records. Report the sale on Form When you file your taxes for the year you sold your delisted shares, use Form to provide information about the sale to the IRS.
If you're using an online tax preparation service, you'll be prompted to enter this information. Generally, your adjusted basis for stock will be the amount you initially paid for your shares, plus the cost of the purchase, such as fees and commissions.
Use Schedule D to summarize your capital gains and losses. Investments in the stock market are capital investments. Other capital assets include real estate, equipment, and furniture. Losses from personal-use property, such as your home or your car, can't be deducted — but investments in stocks always can.
Sales of stock will represent either a capital gain or capital loss to you, which you must report on your tax return for that year. Capital losses are tied to capital gains. You calculate them separately than your other income, such as wages or income from a business. Claim a deduction for your loss on your taxes. The sale of delisted shares was likely a loss for you. Deduct any capital losses to the extent of your capital gains. Include your email address to get a message when this question is answered.
This article mainly applies to selling shares delisted from U. If you have stock delisted from an exchange in another country, the rules may be different. Check with an accountant or tax professional about writing off trading losses as well. Helpful 0 Not Helpful 0. Over-the-counter trading is inherently volatile and risky. Unless you are an experienced investor, you may be better off simply selling your delisted shares to your broker and writing off the loss. Related wikiHows How to.
How to. More References About This Article. Co-authored by:. Co-authors: 3. Updated: August 1, Categories: Financial Stocks.
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