How do I claim worthless penny stocks on my taxes? Old etrade account with $10k loss discovered

Wait I'm confused. If the stocks became worthless in 2020, but OP is just now discovering this in 2025, can they still go back and amend their 2020 return? Isn't there a time limit on amendments?

Generally, you have 3 years from the date you filed your original tax return to file an amendment. So for a 2020 tax return that was filed by the May 17, 2021 deadline (remember it was extended that year), you would typically have until May 17, 2024 to file an amendment. However, there's an alternative approach. If you can get documentation that the securities actually became formally worthless in a later year, you could potentially claim the loss in that year instead. Some people also argue that until you "abandon" worthless securities, you haven't technically realized the loss. You might want to consult with a tax professional about your specific situation since we're approaching deadline territory.

Does this work for older accounts too? I have a TD Ameritrade account from like 2016 with some worthless stocks but I don't even have the statements anymore. Can they still help with that?

I'm suspicious of any service claiming they can magically find delisting dates. Doesn't etrade already provide this info? Why would you need a third party service when you could just check SEC filings?

Yes, it absolutely works for older accounts too. As long as you can get back into the account, they can analyze the trading history even without statements. TD Ameritrade keeps your history available, so you should be able to download it and upload to their system. For skeptical folks, etrade doesn't always clearly indicate delisting dates in their regular statements. The system cross-references your holdings against a database of corporate actions including delistings, bankruptcies, and other events that establish worthlessness for tax purposes. It's not magic - it's just specialized data that most regular tax software doesn't have access to.

How does this actually work? So they just sit on hold for you and then what? Do they transfer you to the IRS person or something? Sorry if that's a stupid question but I'm confused about the logistics.

This sounds like BS honestly. How could a third party service get through any faster than you can? The IRS phone system is a nightmare for everyone. Sounds like you're just paying someone to waste their time instead of yours, if this even works at all.

It's not complicated - they use an automated system to stay on hold for you. When an IRS agent finally answers, you get a call and are connected directly to that agent. No magic, just technology that waits on hold so you don't have to. They definitely don't get through any faster than anyone else would - the IRS wait times are the same for everyone. The difference is you don't have to sit there listening to hold music for 2+ hours. You go about your day and your phone rings when an agent is on the line. I was skeptical too, but when you've been disconnected three times after waiting over an hour each time, you get desperate.

Thanks for this advice! Where exactly do I look on the SEC website to find delisting info? Does etrade provide any documentation I can use to prove the stocks are worthless? These were super small companies so I'm not sure there will be much info available.

You can search the SEC's EDGAR database at www.sec.gov/edgar/searchedgar/companysearch.html by entering the company name or ticker symbol. Look for "Form 25" which is used for delisting notifications, or search for bankruptcy filings like "Chapter 7" or "Chapter 11". As for etrade, they sometimes include corporate action notices in your account, but it varies. Try contacting their customer service to request specific documentation about when your securities became worthless. Sometimes they can provide a letter or statement confirming the worthlessness for tax purposes, though they might charge a fee for this service.

Yes, I've been carrying forward losses for years. Just keep track of your remaining loss balance on worksheet in the Schedule D instructions each year. You'll enter the carryover amount on Schedule D the following year. I started with a $32k loss in 2019 and I'm still working through it at $3k per year.

Thanks for confirming! That's a relief to hear. Do you just keep some kind of personal record of the remaining balance or is there a specific form that tracks this from year to year?