Question:
A few years ago when both WorldCom and MCI stock went to zero my holdings in my brokerage account were converted to some new symbol (98157D106 and 98157D304) with a description saying there was no shareholder equity. Do I need to dispose of these new "shares" before I can report a loss?
Answer:
Yes, you need to dispose of the shares first. That way you are realizing the loss. Then, as far as fed taxes go, you can apply $3,000 of the loss towards your taxes each year until you have used it all up...
I'm not sure, but it would seem likely but you need to exit the position to take a capital loss.
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