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We have invested in a firm for the past ten plus years (not an ESO or ISO). Over time, we have received a return of capital to bring all of the cost basis to zero except for a couple of recent purchases. So we essentially have three “lots”:
We sold most of our ownership last year as part of a recapitalization and now need to figure how to represent cost basis on our personal return. So essentially for this one sale, we have some lots that are Various, and two others where we know the specific basis and dates. We rolled over some of the money into ownership of the new firm. The "Various" long-term lot could cover the entire sale, but we would like to use the two recent lots to clear them out.
Questions:
Thanks for any guidance!
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The tax consequences of selling private stock are the same as when selling shares that trade on a public exchange. Thus, your option where you discuss the FIFO method may be the most accurate way of explaining these various transactions. It does appear that you sold all of your shares, and subsequently moved some of those proceeds into the new firm. Therefore, you would need to account for all of the sales, and determine your basis for each purchase, which it appears you have already done, and then determine your holding period for capital gains tax purposes (long-term or short-term), which it appears you have already done as well.
Regarding using "various" on Schedule D, the use of such term is appropriate if it reasonably characterizes your situation.
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