Loss from the sale of worthless shares

The transfer of worthless shares without consideration between unrelated third parties is also deemed to be a loss-realizing transfer of shares for consideration.

The mere fact that a block of shares has become worthless does not result in a tax-deductible loss. Only the sale of the shares for consideration or the dissolution of the stock corporation triggers such a loss. The Munich Tax Court has now ruled that a transfer of shares for consideration also exists if the shares are transferred between unrelated third parties without consideration. This applies even if the seller acquires shares of the buyer that have become worthless in return.