If a taxpayer's stock in a corporation becomes worthless as a result of the corporation's insolvency during the tax year, the taxpayer's loss is a capital loss as if it occurred on the last day of the year.

Question

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This statement is true according to the IRS rules on worthlessness of stock. The capital loss is treated as if it occurred on the last day of the tax year.

If a Taxpayer's Stock in a Corporation Becomes Worthless as a Result