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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: dumbmoney who wrote (17855)	4/13/1999 11:42:00 AM
From: Marconi	Respond to of 18263

Hello DM: Of course "substantially worthless" is defined in the IRS code but I would not know where to find it. The IRS investment bulletin, Publication 550, if I recall, has the definition and procedure(the declaration is a few paragraphs in the 50 page publication). It is about a 50 page publication. I am sorry I don't have my copy at finger tips at the moment. To my recollection, the IRS commissioner reviews certain securities, such as delisted stocks, and makes a formal declaration that they are substantially worthless. That declaration triggers a tax event. The ideal is to have been short a worthless stock that say gets delisted but is not declared by the IRS to have become substantially worthless. I don't have much experience in that neck of the woods. I wonder if the IRS is pretty regular and thorough in making this declaration (if I recall the declaration and list is published once a year) or if they only make it when prompted by those who have a loss and want to recognize it, but have a hard time finding someone who will buy the shares from them for tax purposes. Relative to the number of listed stocks, the substantially worthless declaration is a relatively rare event. I don't think there is any way to appeal to the IRS commissioner to block their substantially worthless declaration. I hope this helps. Always seek tax advice from a qualified tax advisor, which I am not. I do my own taxes generally, so I have some personal experience to relate. ZITL is likely a short to zero, and therefore could fall into the substantially worthless declaration by the IRS at some future time. I am boxed for now, anticipating a round of hype before the last gasp of this mismanaged company, as well as liberating margin for other more timely investments. Best regards, m