Tax/Bankruptcy question for any lurking CPA's

Edwards Finance > Loans

Q. I was the "proud" owner of "safe" bonds with Conseco. They then declared bankruptcy and the bonds were no more... sort of. After many months I received Conseco stock, worth, about 40% of the redemption value of the bonds. My question: I still have the stock. From a tax viewpoint, 1. can I write off the bonds as worthless, or 2. do I take the "selling" value of the bonds as the initial price of the stock, or 3, do I do nothing until I actually sell some of the stock and use the bond based 'pseudo price', significantly higher since the credit for the bonds was so reduced in 'giving' me stock?

A. -You may want to post this question to a tax group. The best one I am familiar with is misc.taxes.moderated. -Your basis in the stock you received will be the same as your basis in the bonds. When you dispose of the stock, you will then

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