Discussion:Basis of Stock
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Basis of Stock
| 21 March 2007 | |
| I have a real winner here. Stock sold and client has no earthly idea of the cost. Started out as a gift in 1998. (no idea of value as they came from parent who had them over 40 years) Received dividends over the years and all were reinvested. Company was bought out and changed names. One split .....Co. bought out again and in the end client was given some shares by the new Co. and they bought back some shares. Did not give 1 for 1, it was less.... What in the world do I do to come up with a basis. Is there some formula I can use? | |
| 21 March 2007 | |
| At least add up the reinvested dividends based on all records - past tax returns 1099-div etc. | |
| March 21, 2007 | |
| I tell my clients who have stock like this that they are forbidden from selling it. They can either donate it, die with it, or gift it to me.
No matter how much work you do on this you are guaranteed to come up with the wrong answer. I would find the value from 40 years prior to 1998 and use that. Forget about the splits and the spinoffs. Tell the client that this is the best that can be done, and should they get audited the IRS could make them use zero for the cost basis. | |
| 21 March 2007 | |
| I don't mind adding up the reinvested dividends, but other than that I don't know what to do. Your suggestion PVVCPA to just get one old value and use it for the rest of the stock and let it fly is what I will do for the really old stuff. They keep telling me that there is a formula I can use to come up with the basis. I never heard of one. The formula is zero basis. | |
| March 21, 2007 | |
| I used to have a heavy, oversized, leather bound book that included this formula, but I lost that and my magic wand when I moved offices. Can I claim a Casualty Loss for that? | |
To join in on this discussion, you must first
log in.
