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Chapter: 1600 Assets Program: TCA 29 The closing prices (on any particular date) of many stocks may be verified by consulting the following day’s newspaper or financial newspaper. If the closing price of a stock is not shown in the next day’s newspaper, contact a local securities firm to determine its value.

The value of stocks traded over-the-counter is expressed on a “bid” and “asked” basis. A “bid” is the amount being offered for the stock. The “asked” figure is the amount the seller asked for the stock. Use the bid price to determine the market value of this type of stock.

The individual’s statement that a stock is worthless must be supported by a local securities dealer’s statement. 1620.0568 Stock in a Close Corporation (TCA) A close or closely held corporation is wholly owned or controlled by one or more members of the board. Stock in this type of company must be reviewed to determine if the stock is a liquid or nonliquid asset. Usually the stocks cannot be converted to cash within 20 days and they may qualify for exclusion as property needed for self-support.

If such stocks are not traded publicly the value of the stock is determined by dividing the company’s net assets (total assets minus liabilities) by the total number of shares. The corporation’s net assets can be obtained from the corporation’s most recent tax return. 1620.0570 Mutual Fund Shares (TCA) A mutual fund is a company that buys and sells securities and other property as its primary business. Mutual fund shares are generally liquid assets.

The value of mutual funds is determined in the same way as stock values are determined. 1620.0571 Bonds (TCA) When an individual requests that a bond be sold, about seven to ten days are usually required for the individual to receive the proceeds. Therefore, bonds are generally included as assets.

A bond is a written obligation to pay a sum of money at a future specified date. It is a negotiable instrument and is transferable.

Municipal bonds are issued by a state or local government. Corporate bonds are issued by corporations. Government bonds are issued by an agency of the federal government and, except for U.S. Savings Bonds, are transferable.

A bond must be held until the specified date of maturity before it can be redeemed for its face value. The market determines the current cash value of a bond before maturity for it.

If there is a great demand for a bond, its market value may be more than the face value; or if there is little demand, the bond’s current market value may be substantially less than the face value. The current price of a bond can generally be determined as it would be for a stock. 1620.0572 Savings Bonds (TCA) An U.S. Savings Bond is an obligation of the federal government, but unlike other government bonds it is not transferable - that is, it can only be sold back to the government.

Several series of U.S. Savings Bonds (for example, Series I, J, and H) can normally be quickly converted into cash at local banks. These bonds are defined as liquid assets. However, some bonds, including Series E bonds, must be held at least 60 days from the date of issue before they can be converted into cash.