Hi, I'm trying to figure out if I need to amend my return. I inherited stock in 1996 and we sold 5.17 shares of it this year. On my tax form, the cost basis is "missing" and proceeds are listed as 0. I put cost basis as 0 in my return.
(This seems to be a "sale of stock" reporting question, not a "dividend reporting question".)
Do you have to? Probably not. The IRS is much more interested in seeking out people that underpay their taxes than those that overpay and, if you really don't know the basis and can't figure it out then $0 if the most "conservative" way of reporting the trade.
I wouldn't expect the proceeds from 5.17 shares to be terribly material - maybe a hundred bucks or so? - and given that most people have long term capital gain taxed at either 0%, (no change in the taxes you submitted), or 15%, (probably a very small change in the taxes you submitted), you might decide that it's just not worth your time and effort to try and determine a reasonable estimate of your basis.
Of course the unstated assumption in that previous paragraph is that your actual gain (or loss) with an accurate cost basis reported is fairly small, which seems like a reasonable assumption. But of course if those shares were valued at $20,000 when you inherited them and you sold them for, say $15, then it certainly would be worth your while to amend, to claim a considerable capital loss.
Tom Young
(This seems to be a "sale of stock" reporting question, not a "dividend reporting question".)
Do you have to? Probably not. The IRS is much more interested in seeking out people that underpay their taxes than those that overpay and, if you really don't know the basis and can't figure it out then $0 if the most "conservative" way of reporting the trade.
I wouldn't expect the proceeds from 5.17 shares to be terribly material - maybe a hundred bucks or so? - and given that most people have long term capital gain taxed at either 0%, (no change in the taxes you submitted), or 15%, (probably a very small change in the taxes you submitted), you might decide that it's just not worth your time and effort to try and determine a reasonable estimate of your basis.
Of course the unstated assumption in that previous paragraph is that your actual gain (or loss) with an accurate cost basis reported is fairly small, which seems like a reasonable assumption. But of course if those shares were valued at $20,000 when you inherited them and you sold them for, say $15, then it certainly would be worth your while to amend, to claim a considerable capital loss.
Tom Young