Cost basis question

Forum|Forum|4 years ago
July 15, 2021
1 reply
4 views

I sold some shares of German company in my brokerage firm. The shares were dispersed from another account that my employer held. Now that I sold the shares, I am being hit with 100% of the taxes unless I fill out the cost basis. The issue is I bought discounted shares of stock every month, for a period of X years from my employer. The employer sent my brokerage firm the cost basis but they won't take it because it is in Euros and not USD. I cannot even translate it from Euro to USD because I don't know what the exchange rate was when it occurred on that exact date/time. What do I do?

Corrlich44

Level 6

HI jyeh74,

Thank you for posting your question in our forum!

The first approach I would take is to assess the timeline of when shares were acquired each month or annually and document on a spreadsheet in chronological order from inception to sale date.

If the monthly amount of shares purchased is not known, but the annual amount is, I would then break up that known amount into equal monthly increments and then apply the Euro price from the last day of each month using a website similar to Oanda.com (https://www1.oanda.com/currency/converter/) and let your spreadsheet do its magic by mathematically computing the Euro-to-USD value for each month of shares purchased and add up the total.

This will be more than sufficient to reasonably justify a rational basis to document a cost basis you can substantiate upon any unknown audit.

I hope this is helpful to you jyeh74!

Regards,

Alan S.

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jyeh74Author

Level 6

@Corrlich44 the year end statement does have each date and total number of shares purchased at Euro price. It is a specific date once a month for several years. Sometimes it is the 9th of the month and sometimes it’s the 11th of the month. It all varies. However, what do I do about shares given to me, that are transferred to me in bulk that had zero cost?

Corrlich44

Level 6

Hi jyeh74,

Thanks for responding my post....

I would do the exact same thing. If it is your understanding that the shares received in bulk were actually acquired throughout the year or oven a given number of years, then divide up those shares by the number of months you believe you acquired them over a sustained period and then on an average day of the month, whether it be the 9th, 11th or the last day of the month, go to that website I recommended and seek the Euro-to-USD value on that given day and value the security on that day as your cost basis.

As I said earlier, as long as you develop a reasonable basis to arrive at the presumed cost basis, the IRS will have no problem with any of this, should a review of your records be sought.

Just be consistent.

I hope this is helpful jyeh74!

Best of luck!

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