If Fannie May gets taken over by the government and shareholders lose all, can they take a capital loss?

Question

Shareholders of Fannie May may soon be holding worthless stock. Can they take a capital loss and, if so, how much per share?

Answer 1

Brian, don't budget for that capital loss just yet.  If FNMA is taken over, your shares will be replaced by shares of the new entity, and your basis in the investment will continue, but if the number of shares changes, then the basis per share will change.  keep records1  If the new shares are backed by the federal government, then, if the government goes completely broke, claiming a capital loss on your income tax will be the least of your worries.

Answer 2

capital loss per share will depend what they paid for the shares.

if you bought 20,000 for $30k then your capital loss if they go totally bankrupt with no assets returned to you... 30k