Final answer:
Worthless securities are deemed worthless on the last day of the tax year, usually December 31st. This allows investors to claim a loss on their investment, which can be used to offset gains or reduce taxable income.
Step-by-step explanation:
According to US tax laws, worthless securities are deemed worthless on the last day of the tax year, which is typically December 31st.
When a security is deemed worthless, it means that it has no value and is unlikely to recover its value in the future.
This has implications for investors as they can claim a loss on their investment in the year that the securities are deemed worthless.
This loss can be used to offset gains or reduce taxable income.
For example, if an investor purchased stocks for $10,000 and those stocks are deemed worthless in the same tax year, the investor can claim a loss of $10,000.