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ScottyMacEsq
ScottyMacEsq, Attorney
Category: Legal
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Experience:  Licensed Texas General Practice Attorney
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I am being offered stock in a reorganization that has been

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I am being offered stock in a reorganization that has been diluted by 90% of it's orginal value I paid $15,000 for the stock - its assigned value will be only $1,500 after the reorganization. My loss in value is $13,500. I've been told that I cannot recognize the loss until I dispose of the new shares. Is this correct ??

ScottyMacEsq :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacEsq :

Yes, I am sorry to say that this is correct. Only when there is a definite sale of the asset can you determine profit or loss. Just as you don't have to pay any taxes on the profit unless and until you sell the stock, you don't get to recognize any loss until you sell it. That is a definite action that has to be accomplished before there can be any tax effect.

ScottyMacEsq :

I know this is probably not what you wanted to hear, but it is the law. I hope that clears things up anyway. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!

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