I have a 1099 B with no cost basis reported. Under the stock name it is noted Cash/Lieu with $27 in proceeds. Date acquired and sold are same. How do I account for it?

[antoinettemachia]

There is also a note "Cost Basis Not Reported to IRS - Form 8949, (X) along with N/A in the 1e cost basis box and N/A in gain/loss box on first line. On final line cost basis, accrued market discount, wash sale loss disallowed  and Gain Loss are all $0.00.  There is a note that gain loss is N/C because no cost basis.

[TomYoung]

Actually your holding period could be either long term or short term, depending on the details of the deal.  A short term holding would be reported as a Box B sale and a long term holding would be reported as a Box E sale.  You CAN allocate basis to the cash in lieu proceeds, though as a practical matter I'll bet most people use $0.

[DDollar · Accepted solution]

"Cash in lieu" transactions usually occur when there is a merger or acquisition that results in partial shares that are paid in cash.  You should use $0.00 as your cost basis for this and indicate it is a short term transaction not reported to the IRS - "Box C - Short Term Not Reported".