A worthless security is treated as a capital asset that’s been sold on the last day of the year. As such, it generates a long-term capital loss if you’ve held the stock for more than a year or a short-term capital loss if you’ve held the stock for one year or less. To be treated as a worthless security, it must have a market value of zero, whether publicly traded or privately held. It’s up to a taxpayer to prove the security is worthless, and this isn’t always easy to do since the security may no longer be marketable on any established exchange.
Retirement plan set up by a self-employed person, providing tax-deductible contributions, tax-free income accumulations until withdrawal, and favorable averaging for qualifying lump-sum distributions.