[Toronto_Boy]

Hello everyone,
I would appreciate some help on this ....

I owed couple of stocks that are delisted now from the venture exchange. Just wondering how do I go about claiming a loss on it for tax purposes?
Do I need to get any special forms filled by the brokerage indicating these stocks have $0 value?


Thanks in advance.

 

[Eclectic12]

I've simply reported them on Schedule 3, part 3 as if I have sold them. The proceeds was $0 and the commission was $0. It's been around fifteen years since doing this with no questions asked by CRA and the capital loss was used to reduce other capital gains.

If you want to be audit proof and there's an article indicating the stock was delisted - use one of the "print to PDF" utilities to create an electronic record. If you are ever questioned about it - you'll have the article to show it was delisted.


If they keep running and eventually re-list, there might be a problem but mine had their assets bought by other companies so there's no chance they are coming back from the dead. :biggrin:


Cheers

 

[stardancer]

If they keep running and eventually re-list, there might be a problem but mine had their assets bought by other companies so there's no chance they are coming back from the dead. :biggrin:


Cheers

If they ever do go back into business and you actually get money from those stocks, you would then report the $$ as a capital gain with 0 ACB.

 

[james4beach]

I have a small position in a NASDAQ-listed stock (actually founded by a friend of mine, so thought I'd buy some shares to morally support his venture). The stock still exists, but it looks like the company has engaged in fraud and is being hit by various fines and settlements. The price has crashed and the company is late in filing their financials.

Those are not good signs and I wouldn't at all be surprised if the company de-lists. Currently they are still trading though.

I'm happy to hold onto the stock as a "lottery ticket" since the value is negligible. I don't have any concern about further losses, but I'd like to claim the capital loss -- at some point.

If the stock delists from the NASDAQ, then collapses, is claiming a capital loss pretty straightforward? Or is it better to sell now while it's still on an exchange? I'd rather hold onto it in case it rebounds.

@Eclectic21 you wrote earlier that one can claim the capital loss, with evidence of delisting or collapse. Do you still think that's the case? This stock is still listed today. I just don't want to endanger the capital loss claim. Did CRA ever question your capital loss claim?

 

[fireseeker]

If the stock delists from the NASDAQ, then collapses, is claiming a capital loss pretty straightforward? Or is it better to sell now while it's still on an exchange? I'd rather hold onto it in case it rebounds.

Why not sell it to lock in the loss, then buy it back in 30+ days if you still want the lottery ticket?

 

[james4beach]

Why not sell it to lock in the loss, then buy it back in 30+ days if you still want the lottery ticket?

In volatile securities like this I wouldn't want to be out for 30 days. It can move like crazy since it's basically a penny stock now.

 

[Gator13]

You can claim a capital loss:

TaxTips.ca - Worthless Shares or Debt

 

[james4beach]

You can claim a capital loss:

TaxTips.ca - Worthless Shares or Debt

Thanks that's very interesting. So when it looks like the corporation is effectively bankrupt, one can make this election apparently while still hanging on to shares ... meaning it's OK if the shares come back to life. Neat!

I've simply reported them on Schedule 3, part 3 as if I have sold them. The proceeds was $0 and the commission was $0. It's been around fifteen years since doing this with no questions asked by CRA and the capital loss was used to reduce other capital gains.

I'm still curious if your process with this has been smooth. Your post is 9 years old so I'm curious how it worked out.

 

[Eclectic21]

The shares have to be de-listed ... though I do notice that TDDI (and possibly other brokers) now have a process to give them the shares to generate broker approved documents. Should one be worried about CRA coming calling.

... I'm still curious if your process with this has been smooth. Your post is 9 years old so I'm curious how it worked out.

The same as all the other Schedule 3, Part 3 reporting I have done over the last couple of decades. I file it, CRA sends a NOA and that's it.

If you are looking for confirmation CRA did not ask questions ... IIRC, the first one I did this way was reported about fifteen years ago.


Cheers

PS
I wouldn't count on the shares coming back to life. That's happened for one stock in two decades. Far more were delisted because they were gasping their last breaths before disappearing or having what little of value bought up by other companies.

 

[james4beach]

The shares have to be de-listed ... though I do notice that TDDI (and possibly other brokers) now have a process to give them the shares to generate broker approved documents. Should one be worried about CRA coming calling.

Thanks for all the info in this reply!