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mjpb52
Returning Member

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

Sold father in laws mutual fund in 2018 including all reinvested dividends.  Understand the cost basis and adjustments, but a sizeable portion was evidently purchased before 1999.  We have paperwork and reinvested dividends from 1999/2018  but nothing prior due to lack of paperwork ( 1099's) and poor paper trail through 3 brokerages.   Any idea how to determine original cost basis on the remaining portion purchased prior to  99.   Should we use the last available price? Last time identified? Understandably the fudge factor since no one has a clue when this was purchased, perhaps even in the 70's.  


12 Replies
TomYoung
Level 13

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

Did you inherit this stock?  If not, who's selling the stock.
mjpb52
Returning Member

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

No, the mutual fund had been owned by my father in  law.  I have taken over his brokerage account in early 2018 due to his advanced age and dementia.  The only paperwork we have is a quantity from reinvested dividends in 99, (and 1099's from 2004-2018)  and going backwards realizing we have no information on 80X.XX shares.  So we need to establish the basis.  It would be different with inheritance since the basis is the same date as an inheritance. To further complicate The original brokerage is gone, the second brokerage has been sold, and we transferred from the 3rd to another.  
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

Several questions:
1.  Were the shares of the fund held directly in your father-in-law's name and therefore recorded on the books of the fund and statements were issued directly by the fund,
or were the shares held in "streetname" by the brokerage firm and it would be the brokerage firm, not the fund, that would have issued statements to your father?

2.  What is either the ticker or the name of the specific fund?

While mutual fund family companies are required by the SEC to hold history for seven years, many in fact have much older history available on archived digital images or even if older on microfiche.

Just to be clear on this from what you say, your  father-in-law is still alive and you are acting for him under a Durable Power of Attorney or comparable authority.
Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
TomYoung
Level 13

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

I have no idea what your father in law's overall financial situation might be, but maybe the first thing to do, just as an experiment, is to pick the lowest share price, (i.e., the most conservative estimate possible), in the fund's existence prior to where your records peter out, and enter that into TurboTax, after entering all the other income and deductions.  Since long term capital gains are taxed at 0%, then 15%, then 20%, if it happens that a big chunk of the gain, or even all of it, is taxed at 0% you might decide that no more effort to come up with a basis estimate is really necessary.
mjpb52
Returning Member

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

1) no  funds where originally purchased via financial planner/ Wachovia prior to 1999 - than consequently moved to one brokerage after another.
2) Yes under POA handling the affairs
3) Pricing can be obtained via charts that will go back ultimately to the funds inception.  The problem is realistically "what date do I use to establish a price"  now normally over that period of time there should be major gains but the financial planner (advisor) etc.. was incompetent.  Also pricing can be verified via the mutual fund family, I Have spoken to them and need to go and speak to a backroom operation but the ultimate issue is the date .  
4) I am trying to be proactive since with Fidelity and no basis, you can create your own 1099 and get that firmed up and downloaded by a drop dead date of 2/1 for 2/17 delivery.  If I stay with the status quo than have to readjust the complete download in Turbo Tax, which isn't a problem but with years of reinvestments its a hassle.
5) I am unsure if the IRS is closed due to the shutdown , although when I do speak to them I always get 3 different opinions.  I may just stick in a date get a 1099 , and submit as is in early April.  
Unfortunately this isn't my first rodeo with the IRS , I have dealt with them in the past as a trader with mark to market accounting.
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

As for cost basis and IRS view - All of the shares in the time frame that you are discussing were "non-covered" shares so the IRS has no real means of checking the cost.  Secondly, in situations such as you have, the IRS is seeking a "best efforts" attempt to establish cost basis, not absolute nor actual.
Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
mjpb52
Returning Member

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

Appreciate the help, yes started with Wachovia but the planner left for Morgan Keegan which ended up with Raymond James since they purchased MK.  Off course most of the financial aspects of this planner ended up at full load funds, as a matter of fact we complained to FINRA, with documentation of major improprieties but the govt doesn't care.
" Secondly, in situations such as you have, the IRS is seeking a "best efforts" attempt to establish cost basis, not absolute nor actual.", you are very correct on that as a matter of fact if you recall it was only a few years ago that they started questioning your basis and asking where it derived.  

mjpb52
Returning Member

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

Well I have extrapolated from div reinvestments back to some semblance of original purchase.  I do have pricing available prior to 2003.  I am awaiting American Funds, and Touchstone (started as PHBG, Old Mutual Fund, Touchstone) and I believe I am on the right track.
Luckily I can modify the 1099 to the costs at least with a 2/1 drop dead date so as to not reek havoc to the download with just proceeds and no costs.
Amazingly, with these funds in question, held for 20 + years, and the rule of 72 it turns out a return of slightly less than 3.5%.  That is your investment advisor at work.  We caught so many improprieties and even contacted FINRA, which as usual totally worthless.
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

@mjpb52 glad this discussion was of assistance  - don't forget the other two "answers"
Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

@mjpb52

Glad that it was  the case that the fund families did in fact provided you, or are going to provide you, historical data on the purchases and reinvested dividends.  It was my expectation that any currently functioning fund family would likely be able to give you some data and possibly complete data.

The following instruction of the IRS may alleviate the burden of your reporting all these antique transactions for mutual fund shares.  Note that you still have to segregate and report each named fund separately.  The following is taken from IRS Pub. 550 https://www.irs.gov/pub/irs-pdf/p550.pdf and read carefully pages 45 (Cost Basis) through page 46, and see Table 4-1 on page 43.

Using Average basis.

You can use the average basis method to determine the basis of shares of stock if the shares are identical to each other, you acquired them at different prices and left them in an account with a custodian or agent, and either:

  • They are shares in a mutual fund (or other regulated investment company);

  • (not applicable)

  • (not applicable)

Shares are identical if they have the same CUSIP number (remainder not applicable)

If you are using the average basis method and received a Form 1099-B (or substitute statement) that shows an incorrect basis, enter "B" in column (f), enter the basis shown on Form 1099-B (or substitute statement) in column (e), and see How To Complete Form 8949, Columns (f) and (g), later. For details on making the election and figuring average basis, see section 1012, Pub. 550, and Regulations section 1.1012-1(e).

Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

I can assure you, having had specifically a number of load funds as clients that they did/do maintain lengthy historical data beyond seven years.  Again you have not mentioned ticker symbol or fund name.  MFS, Alliance-Bernstein, American-Funds -  like so many load funds used  the TA-2000 processing system by DST while a few used the similar systems from PNC/First Data and Sun Data - all kept microfiche forever and then commenced imaging and digital image storage in and around 1991.  So, again lacking a ticker, but you should pursue with the fund family most likely to have issued the largest amount of shares.
Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
ScruffyCurmudgeon
Level 7

Do we use last known date and price for 2018 Mutual fund sale if purchased prior to 1999 and no records prior?

1.  A. G. Edwards and Prudential Securities - both acquired in the period 2003 (PruSec) and 2009 (AGEd) by Wachovia.  Wachovia acquired by Wells Fargo Advisors in late 2009.  Do you have a contact @ Wells Fargo Advisors?

2. You did not supply Fund Ticker or Fund Name - that said, again I suggest that you seek out the fund where the largest number of shares were held  - see comment about actual history holding period by funds.
Scruffy Curmudgeon--PFFM/ IAFF, Locals 718/30, retired firefighter/medic; univ faculty NOT INTUIT EMPLOYEE
- Strategy & Quantitative Methods Med-M&M, Law discriminatory statistics, Med & PH - epidemiology statistics;
USAR 64-67 AIS/ASA MOS 9301 - O3
-------------------------------------------------------
-------------------------------------No Not an Intuit Employee - Just donating my time
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