Ezel / IRS Rulings / 201333012

CCA discusses potential future value when evaluating worthless stock

Number
201333012
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Worthless Securities
Topics
Income and deductions
Code sections
§ 165
Ruling dated
March 18, 2013
Publicly released
August 16, 2013
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2013, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2013
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice states that potential future value can be a component of valuing intangible assets. In that context, the advice says potential future value remains relevant when determining whether stock is worthless. The writer also sought another person's view concerning Rev. Rul. 2003-125.

Ruling snapshot

  • Question: Is potential future value relevant to determining the worthlessness of stock when intangible assets are involved?
  • Outcome: Advice given. Potential future value remains relevant to valuing the stock.
  • Key authorities: IRC § 165; Rev. Rul. 2003-125.

Full text (IRS public release)

ID: CCA-8894766-13
Office: -------------
UILC: 165.06-00
Number: 201333012
Release Date: 8/16/2013
From: ----------------
Sent: Monday, March 18, 2013 10:33 AM
To: -----------------
Cc: ------------------
Subject: RE: section 165 ---------

---------I looked over the cases and the Rev. Rul, and it seemed to me that potential future
value is a component of determining the value of intangible assets, and in that context is
still relevant in determining the stock's worthlessness. I have send an e-mail to -------------
------------ who has worked with Rev. Rul 2003-125 to some extent to get his opinion also.
He is on --------------------.

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