Federal Mogul went bankrupt and issued warrants for their shares. Can I write this off on my taxes?
Posted by Answers CommunityI bought 1000 shares of Federal Mogul several years ago. They just emerged from bankruptcy in December 2007 and told us that the stock is under a new name and that they were issuing warants for the "new" stock. Can I write this off as bad debt somehow? I did not sell the stock for a loss, it went bankrupt.
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Not until you sold the new stock… Only "recognized" gain or loss counts for tax…
No you can not put that into bad debt, if it is gone also it is loss only and not bad debt. And here you have warrants in your hand so it is a asset anyway (until you sold or warrants expiry). so just put it as loss (indirect) from asset like depreciation but not exactly.