One bad scenario is you sell your private stock to your lawyer, friend, back office firm or brother-in-law. The IRS audits the transaction a couple of years later and says the sale was not an arms length, non related party transaction. They also determine that the private stock was worthless the year before you did your transaction. The year in which the stock because worthless in is beyond the statue of limitations for amending your return. In that case, you many lose the use of the capital loss forever! Now that is bad — a good reason to use CapGain Solutions for sure!