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Princess_Leia

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Reply with quote  #1 
Anyone here knows how to claim losses on our tax returns due to this BDI's bankruptcy?
The value of my claim in the list is a lot less than what I paid for and on top of that, I have no idea how much I am getting back from BDI?
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Princess_Leia

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Reply with quote  #2 
Any ideas? Any tax experts here? The amount of 'obligation' on Schedule F is very much less than what I plonked down.....Can I do capital loss? Also, I am not sure what I am going to get back after all this is sorted out.   [mad] 
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JG

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Reply with quote  #3 
Quote:
Originally Posted by Princess_Leia
Any ideas? Any tax experts here? The amount of 'obligation' on Schedule F is very much less than what I plonked down.....Can I do capital loss? Also, I am not sure what I am going to get back after all this is sorted out.   [mad] 


You might want to check out http://forums.bulliondealerdata.com/post/tax-deductible-7501548 for some preliminary information.

A capital loss is an option, and a theft loss may be an option (which normally results in lower taxes owed than a capital loss, although it does have a high risk of audit).

It does get very complicated (e.g. you cannot likely claim a capital loss for the 2015 tax year, as your investment is not worthless, since you have a bankruptcy claim).

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~bs

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Reply with quote  #4 
I am a cpa, but post this information only as personal opinion, and you should consult your tax advisor for all tax matters

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Keep your cost basis information and records, wait for the bankruptcy proceedings to complete, and a distribution made to all parties.  Then report your losses.  Note that I believe the $3,000 max per year capital losses applies.  Ex you lost $10k from BDI, $1k gain, only a total of 4k of your bdi loss can be offset against your income & 1k gain.  The rest is carried forward.

For investments, generally you cannot report your loss unless it's completely worthless (in this case, you have a bankruptcy claim, so it's not totally worthless) or the product is sold.  

It also may be possible for you to sell your bankruptcy interest for pennies on the dollar, that would probably allow you to take the capital loss.
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Princess_Leia

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Reply with quote  #5 
Thank you, ~bs. Appreciate it. 
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sickmint79

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Reply with quote  #6 
Quote:
Originally Posted by ~bs
I am a cpa, but post this information only as personal opinion, and you should consult your tax advisor for all tax matters

------

Keep your cost basis information and records, wait for the bankruptcy proceedings to complete, and a distribution made to all parties.  Then report your losses.  Note that I believe the $3,000 max per year capital losses applies.  Ex you lost $10k from BDI, $1k gain, only a total of 4k of your bdi loss can be offset against your income & 1k gain.  The rest is carried forward.

For investments, generally you cannot report your loss unless it's completely worthless (in this case, you have a bankruptcy claim, so it's not totally worthless) or the product is sold.  

It also may be possible for you to sell your bankruptcy interest for pennies on the dollar, that would probably allow you to take the capital loss.


why a capital loss instead of a theft loss?

i've already been good enough at capital losses to carry them over for quite some time :/
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