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[tapewoman]

Jurisdiction/Place:

I hold uncollateralized notes in ABFS which declared Chapter 7 in 2005 (changed from original Chapter 11). The trustee opines that assets left for unsecured creditors will be 'de minimus' but expects final resolution to take approx. 2 years. Can I declare a total loss on my 2005 tax return, or do I have to wait for final resolution?

[vollpreuss]

Have you received any definitive advice on this? I am in the same situation. Thanks

[tapewoman]

No I haven't yet. But if I receive advice outside of this forum I'll be sure to post it and would appreciate you doing the same.

[vollpreuss]

Thanks. Will do.

[vollpreuss]

I studied Publication 550 and then called the IRS. They advised the bankruptcy proceeding must be complete and that, ideally, you should have a letter from the trustee indicating the worthlessness of the note. As it is an unsecured note they suggested it is a nonbusiness bad debt but they would make a better determination once the first steps are complete. Sadly, it looks like a multi-year wait.

[Frank12693]

Vollpreuss
I have ABFS , "Series A Convertible Preferred Stock" from exchanging unsecured notes.
I can't find any information about the stock in the court postings, or from George Miller, Trustee for the notes. I know it is worthless, but I would like to take a capital loss.
Any information would be helpful.
Thanks
Frank12693