Need to sell impossible to sell shares

[bmcgonig]

Hey folks

I have some paper shares in a UK company that I bought on a friends and family basis many years ago. They’re pretty much down almost 90% ( probably more..some friend and family deal that was!)

The trouble is that I need a UK account to sell the shares. And I don’t have one, nor can I get one. But I’d really like to sell them for a tax write off. Is there any way that you can think of that I can sell them legally to someone and the IRS will be OK with it?

Schwab can’t sell them unless the share price or the market cap is above certain values and I’m a long way off from those,

[njhowie]

You can donate them to a charity, or your alma mater. Let them deal with the headache of selling it.

IRS will be fine with it.

[RunningBum]

Quote:

Originally Posted by njhowie You can donate them to a charity, or your alma mater. Let them deal with the headache of selling it.

If they itemize, which is not a given, the charitable deduction will only be the current value of the stock. They won't get the advantage of the capital loss, which seems to be the goal here.

I'd check with other brokerages to see if they'll sell it and transfer it there if they will.

[athena53]

Do you have any "friends and family" left in the UK who could sell it? I think as long as they paid you whatever they netted from the sale and you kept documentation, the IRS would be OK with it.

[Jerry1]

Can’t they just be written off? Claim them to be worthless and take the loss. To be technically correct, take the loss on the tax return at the value you would have incurred had you been able to sell them. Doesn’t sound like the difference would be material. Basically, if you can’t sell them, they’re worthless. Just a thought.

[jim584672]

Usually a stock broker can give you a pittance and get you out, but the UK thing may complicate that.

[bmcgonig]

Quote:

Originally Posted by Jerry1 Can’t they just be written off? Claim them to be worthless and take the loss. To be technically correct, take the loss on the tax return at the value you would have incurred had you been able to sell them. Doesn’t sound like the difference would be material. Basically, if you can’t sell them, they’re worthless. Just a thought.

That’s the question I guess. Would the IRS accept that.

[bmcgonig]

Quote:

Originally Posted by athena53 Do you have any "friends and family" left in the UK who could sell it? I think as long as they paid you whatever they netted from the sale and you kept documentation, the IRS would be OK with it.

I do have family there. I’ve thought of that but wasn’t sure if the IRS would accept that either.

[RobbieB]

Yeah, sign over (notarize) the certs and mail to you family, they can sell at market, tell you the price. Split the dough -

The IRS probably don't know what you paid either (uncovered) so you will probably have to file that form too.

[bmcgonig]

Quote:

Originally Posted by RobbieB Yeah, sign over (notarize) the certs and mail to you family, they can sell at market, tell you the price. Split the dough - The IRS probably don't know what you paid either (uncovered) so you will probably have to file that form too.

Thanks. Yes, IRS doesn’t know the cost basis. Which forms are you referring to file?

[RobbieB]

I can't remember, turbo tax does that for me.

[ERD50]

Quote:

Originally Posted by RobbieB I can't remember, turbo tax does that for me.

If you want to claim a loss, I think you are going to have to provide a 1099-B for the sale.

Turbo Tax may be importing that for you from your broker, but if the sale didn't happen, no 1099-B.

-ERD50

[ERD50]

This sounds like what you need?

https://www.irs.gov/faqs/capital-gai...her-property-1

Quote:

Question I own stock that became worthless last year. Is this a bad debt? How do I report my loss? Answer If you own securities, including stocks, and they become totally worthless, you have a capital loss but not a deduction for bad debt. Worthless securities also include securities that you abandon. To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Treat worthless securities as though they were capital assets sold or exchanged on the last day of the tax year. You must determine the holding period to determine if the capital loss is short term (one year or less) or long term (more than one year). Report worthless securities on Part I or Part II of Form 8949, and indicate as a worthless security deduction by writing Worthless in the applicable column of Form 8949.

-ERD50

[daylatedollarshort]

Reddit has a UK legal advice subreddit and posters are very helpful. You could try asking there. The moderators are kind of jerks, so be sure to say "I searched Google and couldn't find the answer" in your post or they will delete your post and all the replies.

[jim584672]

Worthless US securities get moved to the DTC 8899 internal account and your position gets taken away.

[bmcgonig]

Quote:

Originally Posted by ERD50 This sounds like what you need? https://www.irs.gov/faqs/capital-gai...her-property-1 -ERD50

Interesting. Thanks. The stock isn’t worthless unfortunately. It still trades and is a viable company. However the included reference to abandoning a stock is not something I’ve come across before. I wonder how you do that. I’ll Google that.

[cathy63]

Quote:

Originally Posted by bmcgonig That’s the question I guess. Would the IRS accept that.

Quote:

Originally Posted by bmcgonig I do have family there. I’ve thought of that but wasn’t sure if the IRS would accept that either.

The IRS is very unlikely to look at it. In the vast majority of cases, they will "accept" whatever you report on your tax return just because no human is going to interact with your return or think about it. Reporting the sale of a capital asset without a 1099 is a pretty normal thing that happens to a lot of taxpayers and it's not something that will kick your return out of the electronic processing cycle for a human examination unless the amounts involved are extraordinary when compared to your other income.

It sounds like it's a long-term transaction, so it goes on a Part II of form 8949 with box F checked for "Long-term transactions not reported to you on Form 1099-B". There's a checkbox right on the form because it's so common. It's used for cases like yours where you sell stock outside of a brokered transaction (such as if you sell to your family member in the UK), or if you've invested in collectibles and sell those on eBay, and similar situations. If you use software to do your own taxes, all programs have a way to enter these types of transactions.

[bmcgonig]

Quote:

Originally Posted by cathy63 The IRS is very unlikely to look at it. In the vast majority of cases, they will "accept" whatever you report on your tax return just because no human is going to interact with your return or think about it. Reporting the sale of a capital asset without a 1099 is a pretty normal thing that happens to a lot of taxpayers and it's not something that will kick your return out of the electronic processing cycle for a human examination unless the amounts involved are extraordinary when compared to your other income. It sounds like it's a long-term transaction, so it goes on a Part II of form 8949 with box F checked for "Long-term transactions not reported to you on Form 1099-B". There's a checkbox right on the form because it's so common. It's used for cases like yours where you sell stock outside of a brokered transaction (such as if you sell to your family member in the UK), or if you've invested in collectibles and sell those on eBay, and similar situations. If you use software to do your own taxes, all programs have a way to enter these types of transactions.

Thanks for that. My income is really only Roth conversions since I’m retired. So the loss will be quite large in comparison. Maybe if I sell some stuff for a comparable gain, it will draw less attention.