@FU09 wrote:
Recently received an unclaimed property check from state of California for stock proceeds that were being held at a brokerage firm. I have no dates associated with these proceeds, state only sent a chk. Is this reportable? Is this considered a long term capital gain? Will I get a tax doc,? I have no idea where to go from here....
Only the state can tell you if they will send a tax document.
The tax laws take the position that all income is taxable unless you can prove otherwise.
If this is proceeds from the sale of stock, can you at least guess at which stocks they were? Can you contact the brokerage for that information? Presumably they knew your name, but were unable to locate you to send a check; maybe you changed addresses and bank accounts. They should still have records.
If you can figure out what happened, then you would report the purchase price and date from the broker records, the selling price from the broker records, and the date of sale as the date you got the unclaimed funds. It will either be a long term or short term gain depending on how long you had held the stocks before the sale. It might even be a deductible loss, depending on what was sold and when.
If you can't get the info from the broker, you will have to make a calculated guess on your taxes. You could report the entire proceeds as regular income and pay regular tax rates. Or, you could report it as a long term capital gain and pay the lower rate, based on the info that this money came from a broker. But if you are audited, you would have to prove this was a capital gain and not regular income, which means contacting the broker, so you need to do that anyway. Lastly, if the state does not issue a tax document, you can take the chance of not reporting anything. But if you get caught, you will be assessed tax, penalties and interest.
