tax treatment of disposal of worthless asset

[GrayHare]

Can't find a description or example of the following in the IRS regs. If a capital asset becomes worthless but requires expenses to be disposed, when computing the tax loss are those expenses included? For example, I buy a capital asset for $1000 that later becomes worth $0, but it costs me $100 to get it off the books, is the capital loss $1000 or $1100?

 

[SecondCor521]

I believe it would be $1100. Transaction costs are added to basis, so you would report a basis of $1100 and a sales price of $0. At least that is the case with worthless stocks, not sure what kind of capital asset you're talking about, but don't see why it would be any different.

 

[Fedup]

$100 is expense. Can you claim some where.

 

[SecondCor521]

https://www.taxact.com/support/1073/2016/cost-or-other-basis-expenses-of-sale

 

[Fedup]

It might not be stock. I disposed a $2000 worthless stock option because there was no value in it, but I had exercised for long term capital gain. I didn't have to spend money to sell it. It's already worthless.

 

[DrRoy]

I believe it would be $1100. Transaction costs are added to basis, so you would report a basis of $1100 and a sales price of $0. At least that is the case with worthless stocks, not sure what kind of capital asset you're talking about, but don't see why it would be any different.

+1 The cost basis of an asset includes transaction costs.