.
(This information may apply to both U.S and Canadian residents. Further enquiries is recommended)
Even if a company is bankrupt and is auctioning off what remains of its assets, that stock may still be listed on the OTC market for pennies. If you owned 100 shares and wanted to unload them to claim your loss, the transaction costs could eat up the entire proceeds and then some.
An alternative would be to dispose of the shares to a brokerage firm. Most brokerages have a general account into which they will take dispositions of non-transferable securities from customer's accounts for a net sale cost of zero. When they do this, they remove the shares from your account and generate a confirmation of the transfer.
You can then use this "confirm" as supporting documentation of the "sale" and that you received nothing as the proceeds. Using this documentation, you can claim the amount of your original cost as a loss. Ask your brokerage firm about their process for disposing of non-transferable securities.
An alternative would be to dispose of the shares to a brokerage firm. Most brokerages have a general account into which they will take dispositions of non-transferable securities from customer's accounts for a net sale cost of zero. When they do this, they remove the shares from your account and generate a confirmation of the transfer.
You can then use this "confirm" as supporting documentation of the "sale" and that you received nothing as the proceeds. Using this documentation, you can claim the amount of your original cost as a loss. Ask your brokerage firm about their process for disposing of non-transferable securities.
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