Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
davereynolds
New Member

I received a small amount of stock as a child which I sold this year. I don't recall the date acquired or know the cost basis of the stock. How do I determine cost basis?

 
1 Best answer

Accepted Solutions
maglib
Level 10

I received a small amount of stock as a child which I sold this year. I don't recall the date acquired or know the cost basis of the stock. How do I determine cost basis?

You need to do the best efforts of finding your basis. If you can't provide a basis, the IRS assumes no cost so do your best efforts in recreating the basis, always err on the conservative side.

Often the company has a website that would help.  There are also many stock cost basis calculators on the internet that you can search for.

Your basis would have been the amount you paid plus fees for the stock plus any dividend reinvestments you possibly made over the years, adjustments for stock splits and corporate actions. 

If the stock was received in an inheritance, you got the FMV at 12/31 of the year of death.  If it was a gift you got the original holders cost basis (unless at time of gift it was a loss, then you got the FMV on date of gift this is to avoid transferring losses to higher income tax returns).

If the amount is deminimis, you can just enter $0 as the cost basis and see the impact to your return..

If you do not report it , the IRS does get a copy and will bill you plus interest and penalties for the full proceeds and assumes $0 basis.

I wish you luck and hope this answer was helpful?

View solution in original post

2 Replies
maglib
Level 10

I received a small amount of stock as a child which I sold this year. I don't recall the date acquired or know the cost basis of the stock. How do I determine cost basis?

You need to do the best efforts of finding your basis. If you can't provide a basis, the IRS assumes no cost so do your best efforts in recreating the basis, always err on the conservative side.

Often the company has a website that would help.  There are also many stock cost basis calculators on the internet that you can search for.

Your basis would have been the amount you paid plus fees for the stock plus any dividend reinvestments you possibly made over the years, adjustments for stock splits and corporate actions. 

If the stock was received in an inheritance, you got the FMV at 12/31 of the year of death.  If it was a gift you got the original holders cost basis (unless at time of gift it was a loss, then you got the FMV on date of gift this is to avoid transferring losses to higher income tax returns).

If the amount is deminimis, you can just enter $0 as the cost basis and see the impact to your return..

If you do not report it , the IRS does get a copy and will bill you plus interest and penalties for the full proceeds and assumes $0 basis.

I wish you luck and hope this answer was helpful?

View solution in original post

TomYoung
Level 13

I received a small amount of stock as a child which I sold this year. I don't recall the date acquired or know the cost basis of the stock. How do I determine cost basis?

Before you go to a lot of time and effort trying to come up with a basis to report, you might just try entering into TurboTax the sale with $0 basis.  Assuming you were a "child" over 1 year ago the the holding period is "long term" and you may find that entering the sale results in no increase in taxes.   That's because if you are in the lowest two tax brackets long term capital gain is taxed a 0%.  (Even if you're not in the lowest two tax brackets this probably would be taxed at the 15% long term capital gains rate.)

If your tax liability doesn't change at all or changes a very small amount you might just decide to leave that basis at $0.

Tom Young

Dynamic AdsDynamic Ads
Privacy Settings
v