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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Kaye Thomas who wrote (2219)	5/23/1999 4:08:00 PM
From: Colin Cody	Read Replies (2) \| Respond to of 5810

Kaye, Yeah I forgot about that. In all my years I have never filed for one. Could open a can-o-worms if filed, IMO. But of course if you blew it and the stock was worthless in a prior year, this is the way to get the tax deduction! Bad Debts and Worthless Securities A special seven-year limitations period applies to refund claims relating to an overpayment of income tax attributable to a bad debt or a worthless security. The claim must be filed within seven years from the date prescribed for filing the return (without regard to any extension) for the taxable year for which the claim is made. §6511(d)(1) §6511(d)(1)(B). In lieu of the normal three-year period, the seven-year period runs from the due date of the return (without regard to extensions) for the year with respect to which the claim is made. If a carryback is involved, the seven-year period runs from the due date of the return (without regard to extensions) for the year of the net operating loss that results in the carryback. However, if the general limitations period applying to net operating loss carrybacks is longer, that period applies. §6511(d)(1) Regs. §301.6511(d)-1(a). These rules apply only to an overpayment resulting from the deductibility of a debt which becomes entirely worthless during the year for which the claim is made; they do not apply to a debt that becomes partially worthless during the year. Regs. §301.6511(d)-1(c).