Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.
This won't be taxable, because the value of the shares is less than the basis.
The only time you have to pay tax is when you receive funds that are greater than what you bought into the company
But Equity is sending a value of $40,000 distribution to the IRS
How is it $40,000 when you received nothing?
Because that is the face value shown on the stock certificates, in their mind that is what the stock is worth and therefore they are reporting the value distribution.
This is in your IRA, correct?
It was an IRA account, because I closed my account with Equity they are considering this a distribution
If you have any documents indicating that the stock was worthless then you could could provide these to the IRA trustee to request a letter of correction that you could forward to the IRS. If the IRA trustee will not cooperate then if you have any documents indicating the worthlessness of the stock you could send these to the IRS with an letter of explanation.
The best I have been able to find is an article in a Houston newspaper stating that chapert 11 was filed. I never received any notice from the company or the bankruptcy court about the final disposition. I just know if you try and call Amidee, the phone has been disconnected.
The documentation of the bankruptcy should be enough.
Ok, thanks much for your help.