closing Roth IRA with worthless stock
Question:
I purchased $15,000 of unregistered stock as a “qualified investor” several years ago, knowing I could lose it all, but gambling that it would some day provide a handsome return. It did not, is now worthless and the company no longer exists. I am holding the stock in a Roth IRA (purchased with Roth money) and paying annual custodian fees. The custodian wants me to submit all sorts of paperwork and justification to close the account. I have none.
I just want to avoid any further custodian fees. There are no assets in the account.
1. Can I just ignore the custodian and let the account die for inactivity?
2. If I have to do some paperwork, what is the minimum?
3. If the custodian’s demands are abuse, who do I complain to?
Permalink Submitted by Alan - IRA critic on Sun, 2019-02-03 17:57
Do you have any other Roth IRAs? What is the custodian asking for, some sort of statement as to the value of these shares? I suppose you could abandon the account and let it be escheated to the state. Hard to know what amount the custodian would report on the related distribution 1099R that you would have to report on your return. But it wouldn’t matter as long as the amount was less than what you contributed to the Roth in the first place. If you have other Roth accounts however, they are all treated as a single combined account.