A client of mine had an ESOP in the early 80's. It was amended to become a Profit-Sharing Plan. The two sons of the founder were the only participants and have 100% of the stock in the plan.

One of the sons left the company to pursue other interests, and his stock holdings outside the plan were being redeemed.

Remaining participant son calls me up and tells me the corporation was disolved. What do I do about the $200k of "stock" I'm carrying on the books?

The Profit Sharing Plan should have gotten its pro-rata share of any proceeds payable to the shareholders when the corporation was liquidated. If there were no proceeds payable to the shareholders, the stock owned by the Plan became worthless and should be written off as a total loss.