Khan_Windsor
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Joined: 18 Oct 2007
Location: Canada
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Posts: 125
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| Posted: 15 Jul 2012 at 19:10 | IP Logged
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Ok, i am confused. I read in becker book that you cannot deduct worthelss stocks if you are NOT the original buyer of the stocks, but when i was doing final review questions, there is a deduction for those worthless stocks by the person who inherited them
The following facts were gathered by Tim Gearty, the CPA who prepared the Green's current year (20X9) tax
return. (Ignore phase-outs unless otherwise instructed.)
Dennis and Kelly Green, ages 55 and 45, respectively, are married and file a joint tax return.
Information pertaining to the Green's 20X9 (current year) stock transactions follows:
Purchased Stock Sales:
Black & Decker
XYZ Corp.
Acquired
6/30/20X2
2116/20X9
Sold
7/15/20X9
9/22120X9
Cost
$3,000
5,000
Proceeds
$6,500
2,000
Inherited Stock Sale:
In addition to the stock sales shown above, Kelly inherited 500 shares of Misery Corporation. Her father had
purchased the stock at a cost of $5,000. The company is now bankrupt and out of business. At her father's
death, April 1, 20X1, the FMV of the stock was $8,000. Court documents reveal that Kelly will receive nothing for
her 500 shares.
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Topic: Inherited stocks
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