The path suggested by retmd is probably the path I'll take here. But there are a couple of gotcha's that folks should be aware of if they are in this situation.
1) From the perspective of the IRS a stock isn't worthless until it is basically unmarketable (not the case for me). From my view a stock that costs more to sell than its value is "worthless" - the IRS would not agree with me on this point and I have heard that arguing with them on such matters is not the best of ideas :-)
2) If you own a worthless stock (as defined by the IRS) you can claim the relevant loss. But this is actually a VERY BAD situation because you are required to claim the loss in the year that the stock became worthless. And demonstrating that no one will ever want to buy that stock can be really hard short of an event such as a bankruptcy/etc.
3) Another option that I could use is to acquire the paper shares and "sell them" to my kids, parents, somebody outside of your "taxable family". Then you could claim the loss and someone close to you could still capture any gains that might be forthcoming. Apparently this is doable but I don't really know the process that the IRS would require in this case. I've given shares to family members but never sold them.
FWIW.
dave
