I have a friend that holds nortel stock and is on a fixed pension. Here is the question as simple as I can put it. If he has no capital gains in the year how does he write off a loss on this stock that he says still shows up at a price of half a cent. I will try to get more info from him as this was just a quick conversation or if anyone can help with a suggestion it would be appreciated.
nortel stock
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i see 2 related questions here.
1) how to take a loss in NT when there are no capital gains during the taxation year.
ans: already posted (losses can only be netted against gains.)
2) how to take a loss in NT at any time:
ans: if there's no OTC market taxpayer has to "sell" the stock to generate a loss, presumably to a friend or relative who has an account at same brokerage (broker will charge a fee.)
note: unless he intends to carry the loss back to gains in prior years, it's probably better not to sell for a loss this year, because tax consequences of a loss carry-forward are not quite as beneficial as netting a loss against gain in same taxation year. Just carry the miserable thing forward.
if he never has any gains i won't dare to ask what's he doing in NT in the first place ...
1) how to take a loss in NT when there are no capital gains during the taxation year.
ans: already posted (losses can only be netted against gains.)
2) how to take a loss in NT at any time:
ans: if there's no OTC market taxpayer has to "sell" the stock to generate a loss, presumably to a friend or relative who has an account at same brokerage (broker will charge a fee.)
note: unless he intends to carry the loss back to gains in prior years, it's probably better not to sell for a loss this year, because tax consequences of a loss carry-forward are not quite as beneficial as netting a loss against gain in same taxation year. Just carry the miserable thing forward.
if he never has any gains i won't dare to ask what's he doing in NT in the first place ...
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