Do I need a cost basis of stock received from the demutualization of insurance company?

I sold some shares and they are asking for it.

posted

Yes. If you do not know your cost basis or if you do not have a cost basis then the amount would be zero. Be sure to select the correct holding period. If you owned the policy for more than one year as of the date of the demutualization, the gain is treated as long-term capital gain. If you owned the policy for a year or less, the gain is short-term capital gain. Refer to Internal Revenue Code section 1223(1). Tax Topic 430

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