On the 1099-B provided by the broker, there is a section titled, "Undetermined term transaction for noncovered tax lots". There is information in Date sold (item 1c), Proceeds (item 1d) and Additional Information. Every other column is blank. The Additional Information reports a 'Principal payment cost basis factor' with a reference to note 16. Note 16 says if I know the cost of the asset, I can determine gain or loss. I do not know the cost of the asset. The note goes on to say if you don't know the cost, "determine your cost basis by multiplying your adjusted cost basis by the cost basis allocation factor".
For an example: The amount in item 1d is $1000. The cost basis factor in Additional Information is 0.02.
"Cost basis allocated to the sale" is "adjusted cost basis" * "cost basis allocation factor".
Question 1: What is the adjusted cost basis? (The item 1d is labeled Proceeds)
Question 2: What is the cost basis allocation factor? (The number listed in Additional Information is Cost basis factor.)
Question 3: How do I determine gain or loss?
Hopefully someone can decode this for me.
