Form 1099-B / 8949 Cost Basis

[musicmaiden161]

After selling a mutual fund held since 1993, I received my 1099-B with two parts.  The second part stated " Transactions for which basis is NOT reported to the IRS and for which short-term or long-term determination is unknown.  You must determine short-term or long-term gain/loss based on your records on Form 8949, Part I with Box B checked or on Form 8949 , Part II with Box E checked as appropriate".  So , does that mean my cost basis is what I paid back in 1993 ( I never added any additional funds, reinvestments were from Capital Gains and Dividends). 

[fanfare]

No your basis in the first part  is your original investment plus all the reinvested dividends and gains up until the time broker started tracking it for you some time around 2012.

your basis in the second part is on your 1099-B

you need to allocate the two parts based on the number of shares held at the end of the uncovered period.

@musicmaiden161 

s

[fanfare]

clarified 

@musicmaiden161 

[fanfare]

to be clear, the part where basis is NOT reported to IRS, I called the first part (earliest).

[musicmaiden161]

Thank you for your reply! Obviously you know what needs to be done , however, I am still at a loss. I still have the end of year ststements but I do not know what I am supposed to do.  Would you mind giving me an example ? Should i leave it blank in Turbo Tax ?

[ThomasM125]

You may be able to log into your brokerage account and research what dividends and capital gains were earned over the years. You can also look on your prior year tax returns to see what you reported as dividends and gains, to the extent you kept them. Also, you could do some math by creating a spreadsheet that would chart the average return you would likely have earned over the years based on applicable dividend per share percentages and the such.  You need to document the method you use to determine the adjusted basis, which is the original investment amount plus taxable income you reported from the fund over the years.

[musicmaiden161]

I think I figured it out! we paid taxes on all the cap gains and dividends , and I got the statement from 2012 that shows the exact number of shares they reported in part 2 of the form and used that balance as my cost basis.  It wound up with a small gain due to a slight increase in share price since then.  Thanks again!