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I'm in the US. I understand that I can report stocks I sold for a loss and claim some deductions.

What if the stock can't be sold, no one buys it or the company is under? Is there any way to get some money or am I just stuck to owning $0 stock?

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It depends on the status of the stock. If it trades on the OTC market, sell the shares. If there is no market for the security, your broker may be willing to send you a letter stating that securities have become worthless. Some brokers are willing to buy them back from you for a nominal amount.

To deduct the loss, the stock must be completely worthless. To establish that securities are worthless, there must be a specific identifiable event that caused worthlessness:

  • the company has stopped doing business
  • the company is insolvent
  • the company’s assets have been liquidated
  • the company has filed for bankruptcy or a bankruptcy receiver was appointed.

If there's any chance that the securities have value, they're not worthless.

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If the company went bankrupt, your year-end statement from the brokerage should show the stock as now worthless and report a loss equal to what you paid for the stock. This happened to me a couple of years ago.

If it's an OTC stock and the company is still in business but you can't find a buyer ... hmm, I've never run into that situation. I'll yield to others on that one.

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