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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3078
Experience:  EA, CEBS - 34 years experience providing financial advice
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If you have stock that just filed chapter 11 do you claim this

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If you have stock that just filed chapter 11 do you claim this loss on your taxes for 2008 and do you claim purchase price of this stock? I transfered this stock from smith barney to Ameritrade before they filed and ameritrade does not show my original purchase price. Any advise on this would be appreciated. One other question regarding my taxes... I had unemployment income and SS surviors benefits along with interest income for 2008. I paid no taxes for 2008 since they dont deduct taxes..do I have to get a type of form with estimated taxes on it and pay now before the end of the year 2008?
Submitted: 5 years ago.
Category: Tax
Expert:  Bill replied 5 years ago.

When a company files for chapter 11 that does not mean the company is worthless. Chapter 11 permits the company to keep operating and reorganizes under bankruptcy. A loss on a stock can only be claimed when the stock is totally worthless. If the stock eventually becomes worthless then the loss that you would claim would be your investment in the stock.

If you are not going to owe any federal income taxes this year then you will not have to pay estimated taxes. Unemployment benefits and interest income are taxable. Social security benefits start to become taxable if the sum of 50% of the benefits you receive plus your other taxable income exceeds the base amount of $25,000 if filing single ($32,000 if married filing jointly). In 2008, generally you will not have to file a tax return if your gross taxable income from all sources (unless you have self-employment income of $400 or more) is less than $8,950 if you are under age 65.

 

http://www.irs.gov/faqs/faq/0,,id=199618,00.html

 

Customer: replied 5 years ago.

I am confused with your answer. I did not work during the 2008 year. I received unemployment and Social Security Surviors benefits since my husband passed away.

I have interest from cds, bank accounts. All of this combined will be over 25,000.

I have 3 dependents. Will I have to file an estimated tax now to pay towards money

that will have to be paid when I file my taxes in 2008? Where would I get such a form?

I just do not want a penalty. Also my other stock did earn money when sold so I guess

even though my stock is all at a terrible loss I still have to pay on the money gained at

the time of sale right?

Thanks for your help. I would like this answer

Expert:  Bill replied 5 years ago.
How much will receive in social security benefits this year? How much did you receive from unemployment benefits and how much from interest? How much was the gain on your stock when you sold it? Was the stock titled only in your name, joint name, or your husband's name when it was purchased? What year did your husband pass away? How old are your children? Is the stock that filed for chapter 11 still trading?
Customer: replied 5 years ago.

My husband passed away in2007. The stocks are in my name,and my kids names with me as the caretaker. My girls are 11,13, and 15. my social security survior benefits were about 11,000. The unemployment was about 5,000. Interest could be about 10,000 but that might be to high. Stock gain in Jan 08 was 9,000 but reinvested and now losing in stocks. I have a loss between me and my girls stocks around 30,000 loss but like you stated they are not chapter 7. The stock that has filed chapter 11 is not trading..its zero right now. The sad part all this was for my girls future after my husband passed and now its disappeared. Lets just say the stockbroker lost his job because of what he did to us and others...quick buying and selling fast and not being conservative as I asked.

 

THanks for your help.

Expert:  Bill replied 5 years ago.

Since your husband passed away in 2007 and you have dependents you can file as a qualifying widow. By filing as a qualifying widow with 3 dependents you can have up to $24,900 (based on standard deduction and exemptions) of taxable income without liability for federal income taxes. Your gross taxable income would be approximately $26,700 ($5,000 + $10,000 + $9,000 + $2,700 of social security benefits) based on the information you provided. A portion of your social security benefits would be subject to tax (approximately $2,700). However, you can claim the child tax credit for your children which will eliminate any tax you owe. http://www.irs.gov/pub/irs-pdf/p972.pdf

 

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3078
Experience: EA, CEBS - 34 years experience providing financial advice
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