Did you receive a prospectus or information letter regarding these stock rights? If so, there should have been a discussion of tax treatment. Typically, if the tax status is taxable, you would have received Form 1099-DIV that reported the basis for the rights. If the tax status is non-taxable, some portion of your stock basis may be allocated to the rights. Allocation of basis is to your advantage, as this can offset any proceeds from the sale of the rights.
If you chose to allocate basis, you would report the sale proceeds from Form 1099-B in the same manner as any stock sale, using the allocated cost basis. This could result in no taxable gain or loss from the sale.
Since the brokerage didn't know how you treated the stock rights, they reported the sale as an "undetermined transaction" and could not report a basis. The taxpayer makes the decision on how to report the sale.
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