If I can't determine FMV of private stock I inherited in 1996, how do I determine what to pay in taxes?

[ottawa]

I sold my shares in a privately held "C" Corp in 2016. Company said they are not required to file a 1099. If I can't determine FMV of stock I inherited in 1996, how do I determine what to pay in taxes?  

[TomYoung · Accepted solution]

If you can't come up with a reasonable, supportable estimate for your basis - and frankly I don't see how you could at this point without a lot of potentially expensive work - then you're pretty much forced to report $0 as the basis and pay tax on the entire proceeds.

However, that may not be as bad as it sounds.  Most people pay capital gain taxes at low 0% or 15% rates so the first thing I'd recommend is to enter the LT sale using the $0 basis and see what effect it has on your income taxes.  If it's "no effect" or "very low effect" then it's probably not worth your time and effort to even try to derive a supportable basis figure.

Tom Young