Contact your broker. They have a way of declaring the stock worthless and removing it.
Shredding. Shredding is the ideal solution for any obsolete items you don't want to end up in the wrong hands. This could include things like branded stock or items that have passed their shelf life. Even for items that don't require additional security, shredding is often a necessary step in the recycling process.
Sell Worthless Stock if Your Broker Holds the Shares
Many brokers have a plan to let their good customers sell them worthless stock for $1 or 1c for the lot. If you are a good customer, and stock is with the broker, ask. You should be able to negotiate some solution that will be satisfactory to both sides.
After providing a death certificate, proof of identity, probate court order, and others, the heir can either transfer the shares into their account or sell the shares for the proceeds. Ultimately, this has the potential to save significant sums of money due to the tax loophole.
What Happens If a Stock Price Goes to Zero? If a stock's price falls all the way to zero, shareholders end up with worthless holdings. Once a stock falls below a certain threshold, stock exchanges will delist those shares.
Worthless securities will have a market value of zero as noted above. For a security to become worthless, it not only needs to have no value, but it needs to have no potential to regain value. For example, a company's stock might reduce in value to zero if the market fluctuates enough.
After you sell your reward stock, you're free to use the proceeds from the sale toward other investments. However, if you want to withdraw the proceeds, you must keep the cash value of that stock in your account for at least 30 days after claiming it.
If you have a liquid soup broth for the holidays, feel free to throw it down the drain. However, if it has big chunks of meat or a lot of fibrous vegetables, either just throw it out or only pour the broth down there!
Check expiration dates and if they are nearing the end of life. Sell them at a discounted price or donate them to a charity rather than having to throw them out.
There are several ways to handle obsolete inventory. You can sell them at a discount, bundle them with other products, liquidate them through surplus resellers, try to remarket them to a different audience, or do a complete inventory write off.
Stock waste is destroyed in a variety of ways depending on the material it's made from. Documents may be shredded and recycled, some items might be incinerated, while others are physically broken and destroyed.
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.
Report any worthless securities on Form 8949. You'll need to explain to the IRS that your loss totals differ from those presented by your broker on your Form 1099-B and why. You need to treat securities as if they were sold or exchanged on the last day of the tax year.
Your maximum net capital loss in any tax year is $3,000. The IRS limits your net loss to $3,000 (for individuals and married filing jointly) or $1,500 (for married filing separately). You can reduce any amount of taxable capital gains as long as you have gross losses to offset them.
How to report worthless stock on your tax return. Worthless stocks/securities are reported on IRS Form 8949 of your tax return which is then summarized on Scheduled D. You must first report the stock on Form 8949 because you did not actually sell the stock and did not receive a 1099 from your broker.
The price of a stock can fall to zero, but you would never lose more than you invested. Although losing your entire investment is painful, your obligation ends there. You will not owe money if a stock declines in value. For these reasons, cash accounts are likely your best bet as a beginner investor.
Typically, this happens in thinly traded stocks on the pink sheets or over-the-counter bulletin board (OTCBB), not stocks on a major exchange like the New York Stock Exchange (NYSE). When there are no buyers, you can't sell your shares—you'll be stuck with them until there is some buying interest from other investors.
If inherited stock is later sold at a price above the cost basis, the profit would be subject to capital gains taxes. If the total value of the estate exceeds the federal threshold, taxes will have to be paid on the excess amount.
In order to cash in the stock, you need to fill out the transfer form on the back of the certificate and have it notarized. Once complete, send the notarized certificate to the transfer agent, who will register the stock to you as owner.