I received Prudential Stock in 4/2002 when they switched from a mutual company to a stock company. I sold my shares last year and they did not provide a cost basis.

[rtbiehl]

How do I determine a cost basis for these stocks I paid nothing for.

[TomYoung · Accepted solution]

The IRS's official position is that your basis in the stock is $0, so reporting $0 as your basis certainly will meet with their approval.

This method has been litigated with different courts coming to different conclusions, so you might want to declare a basis in the stock.  This site:

http://www.costbasis.com/stocks/demutualizationshares.html

has a good discussion of the issue and number and methodology you can use, it you want to enter a basis figure.

Tom Young