I hold some shares of a company in a discount broker account that has recently declared bankruptcy to allow for reorganization and is trading on the Pink Sheets, what are my options for dealing shares? Should I hold them in hopes that the company might regain value in the future, or cut my losses and sell off the shares? Also, what happens in the event that the are liquidated and I still hold (now worthless) shares in my account?


1 Answer 1


Well, so long as the shares trade they are valued at greater than "worthless." An important distinction. If truly worthless, you indicate a sell date of the day they were deemed worthless, and a sale price of zero. In your case, the broker should sell the shares for you. If the bid is zero and ask, say .1 cent, the broker should offer a courtesy purchase, i.e. they take the shares, so you can claim the loss.

This loss is used to offset gains from other stocks you sold, if it's greater than the gains, you take a $3000 loss again ordinary income and carry the rest forward, until you use it up against gains or $3000 each year.

  • I clarified the question a bit as there are actually two, one is for a bankrupt company on the pink sheets and a second separate question for if they now have not value.
    – anonymous
    Commented Jan 9, 2012 at 20:15
  • My answer remains the same. Do you have a specific point you'd like me to clarify? Commented Jan 9, 2012 at 20:50
  • Pretty much the only thing I can think of, which might be a bit too specific, is for dealing with the truly worthless shares for post liquidation companies that no longer exist.
    – anonymous
    Commented Jan 9, 2012 at 20:53
  • 2
    To take the loss, you either need to sell, or have a determination the shares are truly worthless. A >$0.00 ask means they still trade. Commented Jan 9, 2012 at 21:12

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