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A little over 10 years, I received a large stock inheritance from my father. (I've been waiting to cash it in, but now I'm in bad financial shape and need the money now).

What I have is a stack of physical stock certificates. They are for General Motors stock that was issued in 1989. In total, I have 13,500 shares.

I've never had stocks before, so I don't know exactly how they work. Therefore I have a few questions.

  1. To determine the total value, I'm assuming I just take the price on Google Finance (listed at 37.80) and multiple by number of GM shares (13,500) which means the current total is $548,100. Is that correct? (That would make sense since my father told me it was worth about $400k before he had passed away).

  2. What do I do with these certificates? Can I bring them to my bank, or do I need to open an account with a stock company like Fidelity?

  3. I read somewhere that I only have to pay taxes when I cash out these stocks. But are these rules any different because I inherited the stocks?

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    GM could be tricky because of the bankruptcy and restructuring that happened a few years ago. You should probably call the folks responsible for GM's shareholders: gm.com/investors/contacts/gm-stockholder-services.html – quid Feb 23 '17 at 4:56
  • @quid I'm confused. GM isn't bankrupt, is it? There are still GM dealers in my neighborhood. – Hans Moleman Feb 23 '17 at 5:06
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    @HansMoleman GM went bankrupt in 2011 and reorganized. The old shareholders received nothing in the bankruptcy. The remnants of GM emerged from bankruptcy in 2010 and raised capital in an IPO which is where the current stock came from. – D Stanley Feb 23 '17 at 5:17
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    @HansMoleman Due to the magnitude of your loss I would contact Motors Liquidation Company at (866) 521-0079 and see what your options are. It's possible that there's some residual value but from what I can tell it's highly unlikely. I feel sick answering you this way given your situation and pray that I am wrong. – D Stanley Feb 23 '17 at 5:24
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    This question is being discussed on another site's meta: workplace.meta.stackexchange.com/questions/4410/… - there are doubts over whether the story is real – GS - Apologise to Monica Mar 16 '17 at 20:09
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I'm afraid you're not going to get any good news here. The US government infused billions of dollars in capital as part of the bankruptcy deal. The old shares have all been cancelled and the only value they might have to you are as losses to offset other gains.

I would definitely contact a tax professional to look at your current and previous returns to create a plan that best takes advantage of an awful situation. It breaks my heart to even think about it.

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    DEFINITELY call a tax pro at least get the most from the loss. – quid Feb 23 '17 at 5:29
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    Thanks Nathan. It's ok, though. I was planning on using all that money to start a really high risk business (can't reveal details here) which probably would've ended up failing anyways. So if anything, maybe this just saved me some time and effort. – Hans Moleman Feb 23 '17 at 5:41
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which means the current total is $548,100. Is that correct?

Yep Unfortunately the "current" GM stock is different than the GM stock of 1989. GM went bankrupt in 2011. It's original stock changed to Motors Liquidation Company (MTLQQ) and is essentially worthless today. There was no conversion from the old stock to the new stock.

What do I do with these certificates? Can I bring them to my bank, or do I need to open an account with a stock company like Fidelity?

See here for some instructions on cashing them in (or at least registering them electronically). I've never dealt with physical stocks, but I presume that a broker is going to charge you something for registering them vs. direct registration, though I have no idea how much that would be.

I read somewhere that I only have to pay taxes when I cash out these stocks. But are these rules any different because I inherited the stocks?

You will pay capital gains tax on the increase in value from the time your father died to the time you sell the shares. If that time is more than one year (and the stock has gone up in value) you will pay a 15% tax on the total increase. If you have held them less than one year, they will be short-term capital gains which will count as regular income, and you will pay whatever your marginal tax rate is.

If you sell the stock at a loss, then you'll be able to deduct some or all of that loss from your income, and may be able to carry forward losses for a few years as well.

EDIT

I did not catch that the stock you mention was GM stock. GM went bankrupt in 2011, so it's likely that the stock you own is worthless. I have edited the first answer appropriately but left the other two since they apply more generally. In your case the best you get is a tax deduction for the loss in value from the date your father died.

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