Tax handling delisting, bankruptcy, etc.

[jfl]

It's very depressing to have this conversation, but I'm a long term investor that's loss too much to sell now.

It seems there are others that are stuck like me and holding out to the end.

If the situation continues to decline, then delisting and bankruptcy cannot be avoided.

Has anyone encountered this scenario with other stocks in the past?
Can you share your lessons learned regarding tax handling?

One option is to sell for a huge loss now and use $3000 carry-over losses as a tax deduction for many years.

Another option is to wait for bankruptcy and deduct entire loss for that tax year.

[matt]

You have only two options:

1. Sell something else you own with a built-in gain and offset the taxes due on that with the loss on MNKD.
2. Exit MNKD with a LT capital loss and offset $3,000 per year if don't have offsets.

If the company goes bankrupt there is no magic tax fairy that lets you write off the entire loss in that tax year; the $3,000 per year limit still applies on LT capital losses without an offsetting LT capital gain. You do get to recognize all your loss in that year, but you may not get the economic benefit till later (much later if you are deep in the hole).