Help with capital gains MetLife distribution Brighthouse shares 8/4/17. Do I use date of deceased parent as date acquired or inherited? Okay to enter zero cost basis?

[g_beckman]

I need the cost basis on 32 shares of MetLife stock. Distribution rate 1 for 11. Brighthouse Financial, Fractional Share 0.909091 Cash in Lieu Rate 58.707848 Gross amount 53.37 are the actual numbers. Computershare does not provide cost basis.  If I enter zero as cost basis do I just pay taxes on the $53.37. Seems much easier than driving myself nuts over calculations.

Also really need to know about the date acquired as I inherited the stock when my mother passed away.

Thank you in advance for your response.

[TomYoung · Accepted solution]

"I need the cost basis on 32 shares of MetLife stock"

Look up the closing price of MetLife on your mother's date of death and multiply that by the 32 shares.  That's your basis in the 32 shares of MetLife.

Then multiply the total MetLife basis by 10.3635%.  That's the basis allocated to the 2.909091 shares of Brighthouse you received.  (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwismpCb8PnYAhXqq1QKHYx1DI4...)

Then multiply that total basis of Brighthouse by (.909091/2.909091) - .3125 - and that's the basis in the fractional shares you sold

Using the "Stocks, Mutual Funds, Bonds, Other" interview enter the sales date, the description of what was sold, the $53.37 as the proceeds, and whatever the above math dictates as the basis.  In the date acquired field enter "inherited."  That will make the gain or loss "long term", which it is according to tax law.

Tom Young

[g_beckman]

Thank you for your response. If I provide you with the actual numbers can you help me with the calculation? This is way over my head. Another contributor suggested I don't have any capital gains as this only applies if stock was sold as opposed to acquired as was the case the  payment received for Brighthouse stock. I'm really confused as to how to enter this information in Turbotax and am not so sure that even upgrading to Turboxtax Premier would help.
Thanks in advance for your response and help.

[TomYoung]

"Another contributor suggested I don't have any capital gains as this only applies if stock was sold as opposed to acquired as was the case the  payment received for Brighthouse stock."

That other contributor was wrong, as simple as that.  You actually received 2.909091 shares of Brighthouse.  But, because fractional shares weren't going to be issued, you sold .909091 shares of Brighthouse.  (Well, the company actually sold them for you but you got the money for the sale so it's "your" sale.)

IF you're going to enter the transaction properly and are dead set on using an "online" version of TurboTax THEN you must upgrade to Premier as that's the first version as you go up the cost ladder that supports the reporting of security sales.

You could take the easy way out and simply report that $53.37 as "Other income."

Even if you upgrade to Premier and report the sale using the "Stocks, Mutual Funds, Bonds, Other" interview you could take the easy way out and simply report a basis of $0, paying tax on the entire proceeds.

If you want to report this transaction correctly then you have to upgrade to Premier and figure out the correct basis to report.  Under the "teach a man to fish" philosophy here's one way to get the correct information:

Go to <a rel="nofollow" target="_blank" href="http://phx.corporate-ir.net/phoenix.zhtml?c=121171&p=irol-stocklookup">http://phx.corporate-ir.net/p...>

Enter the date you inherited the shares

Multiply the closing price that comes up by the 32 shares you inherited; that's your basis in MetLife

Go to <a rel="nofollow" target="_blank" href="http://www.costbasistools.com/spinoff/calculator.php">http://www.costbasistools.com/spinoff/calculat...>

In the drop down menu next to "1. Name of stock received in spinoff" select Brighthouse Financial

Enter the date you inherited in the box "4. Purchase date of original stock (tax lot)

In the box next to "8. Number of shares of original stock, adjusted for splits since purchase" enter 32

In the box next to "9. Total cost of original stock purchase" enter the basis in MetLife

In the box next to "10. Cash received in lieu of fractional shares" enter 53.37

Click the "Submit" button down towards the bottom of the screen

The section titled "Gain or loss on cash received in lieu of fractional shares of Brighthouse Financial Inc/Charlotte NC-BHF spinoff stock" will show the results

[g_beckman]

Thank you so much for your guidance. I was pretty overwhelmed and cannot thank you enough!

[2169elaine]

I am also overwhelmed and would rather just pay the taxes on it and instead of driving myself crazy. Thank you for your answers, it did help to clarify things.

[daniel-souza]

@TomYoung thank you so much for such a detailed answer! I see you helped at other threads as well, very very helpful. I have a similar situation, but in my case my BHF shares came from MET RSU shares distributions.

I am assuming I will have to go through the trade reports from when the RSU stock portion was vested and take the fair market value from there as my MetLife basis, is that correct?

Because I have multiple distributions, I also have multiple sales of BHF fractions reported: i.e. 0.106, 0.177 etc up to the total fraction that resulted in a $47.48 CIL. I am trying to figure out how to report the individual sales, it is taking me a incredible amount of time for such a small figure. ::sigh::

Thanks again. Appreciate if you can shed some light here as well.

[TomYoung]

"I am assuming I will have to go through the trade reports from when the RSU stock portion was vested and take the fair market value from there as my MetLife basis, is that correct?" If you are or were an employee of MetLife and received shares due to the vesting of an RSU then the per share fair market value of the stock on the vesting date is your per share fair market value. The trade reports, W-2's or other contemporaneous information is the best source for your "original basis" before the spin off or any thing else that may have affected MetLife basis along the way. It sounds like the broker, or somebody, did some sort of a lot-by-lot calculation here for some reason and I have no idea why. But the CIL transaction really is a single sale and there's no need to do any income tax return reporting that's more granular than that. Report the proceeds, report a basis, and you're done. If you're meticulously obsessive - I lean that way - then you could go through the exercise of determining how much the basis of each lot is, add up the individual lot figures, take 10.3635% of that total for your basis number to use to report the CIL $47.48 "sale", then spread that amount back to each lot as a small reduction in each lot's basis, based on how much lot's basis, as a percent, contributed to the total basis. On the other hand nobody but you is going to know if you say "the hell with it" and simply report the CIL with no basis, which I expect happens in 87.35% of all CIL's reported on all 1099-B's during a year.

[daniel-souza]

Thank you, you helped me a lot.

[wilsonwickiser]

For MetLife and Brighthouse Financial 1099-B tax info, I received the following information from Computershare for filling out the tax forms on Turbo Tax:

The date acquired is listed on the 1099-B as Distribution Date.

The Cost Basis is 0.

The type of transaction is Short-Tern Non-Covered.

This helped me.  I hope it helps someone else.

[bennythetaxman69]

This treatment is incorrect per various people I've communicated with...did you contact Computershare directly?

[wilsonwickiser]

Yes I did.  I spoke with them on the phone.  Taxes are complicated.  Maybe my answer isn't the answer to your situation.

[assist2025]

So, the transaction is short term non-covered and that is what Computershare told you.  I have same the situation as  @wilsonwickiser  but I have seen other answers to the same situation in regards to this Spin-off distribution. There was a question, but the person was part of "demutualization" in 2000. Where you part of that event @wilsonwickiser?  Under that question, the type of transaction is consider clearly long-term. It could be. I was just curious, if you were part of the "demutalization" in 2000.

[DanielV01]

This doesn't apply to you.  Cost basis and date of acquisition will only come into play when you sell the stock.  A capital gains distribution is an amount that you have received on the value of the stock, but the stock is still an asset that has not lost it's basis.  So actually you are correct in reporting all of the $53.37 as a capital gain, which will receive a more favorable tax treatment on your return since it is a long-term gain (more than one year held).  

But you do want to know the acquisition date and the cost basis for when you do sell the stock.  You certainly will not want to report zero as the stock's basis because that would make the entire amount taxable.  Your cost basis was the value of the stock when you inherited it.  However, your acquisition date is when your mother purchased it.  

[assist2025]

Is the cost basis that you are referring to in this answer, Brighthouse company? If so, how would someone determine cost basis of Brighthouse off the information from a 1099-B when the cost basis was not reported? I see that Box E on Turbo tax and I do not know what to put in there.  I am seeing answers posted on here just to put 0 in the Cost Basis?