Thanks for the reply Dave, unfortunately my question wasn't about how to establish cost basis for any old security, but establishing a cost basis for bonds that have been through a bankruptcy and taking a big haircut on the principal. By the way, not all interest on bonds are taxable at the federal level, if I'm understanding your response correctly, the bonds were originally sold as tax free bonds so I'm not sure your answer about interest is correct, unless of course the settlement changed the status of the bonds from tax free to taxable; which is one of the items I'm trying to figure out.
