X-Message-Number: 6502
Date: 12 Jul 96 02:13:40 EDT
From: Paul Wakfer <>
Subject: Re: Pledging to the Prometheus Project

     The question of tax deductions for losses on the value of shares is way
off topic for this forum. So I apologize for continuing the discussion and I
do so only because of its possible relevance to those thinking of pledging to
this Project.

     Neither answer to the stock loss write-off question has addressed the
question of how a new value for the stock is determined. This is obvious if
the stock is publicly traded and actually sold. But otherwise the following
questions need to be addressed:

1. Is it necessary to "justify" the sale price of non-publicly traded shares? 
   And if so, then what justification is necessary to satisfy the IRS?

If it isn't necessary, then clearly every one who owns stock should sell them
to someone for $1 with an arrangement to immediately buy them back for $1.
Then they would have the use of the money gained by the loss until they
decided to sell the shares "for real" and would then have to pay tax on the
larger capital gain (but not larger, in total, when counting the tax loss
from the interim share price reduction). Somehow I don't think the IRS would
allow the "borrowing" of this loss from what the IRS believes is *its* money.

2. How is it determined that a stock is "worthless"?

Does the issuing corporation have to go bankrupt or out of business? Do you
have to make some "reasonable" attempt to sell it and fail to find a buyer,
or what? Or can you just declare it worthless, destroy the shares and take
the loss, making it like a donation without requiring a 501(c)3 to put it
through (if you have capital gains to set it against, of course)? (And in the
process possibly increasing the value of all remaining shares.)

I hasten to add that because of the way that the Prometheus Project is
structured, I also don't think that any of these stock loss questions are
very relevant except perhaps in the short term or in the case of total
failure of the project to achieve its research goal even though fully funded
and executed for the full 10 years. I sincerely believe that stock issued to
fund this project will ultimately be of great value.


-- Paul --

!!!!! REVERSIBLE BRAIN CRYOPRESERVATION *CAN* BE ACHIEVED IN 10 YEARS !!!!!

Paul Wakfer  email:        Voice/Fax:     Pager:
US:     1220 E Washington St #24, Colton, CA 92324 909-481-4433 800-805-2870
Canada: 238 Davenport Rd #240, Toronto, ON M5R 1J6 416-968-6291 416-446-9461
(currently in Canada)


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