Selling Mutual Fund - cost basis unavaiable from 1979 to 1987

[dmorsecode]

I've got cost basis remarkable for 34 out of 43 years. I was gifted the fund when I was 13 and didn't add to it until 1989.  In 1988, I know the value and number of shares, however I have no idea about the dividends and cap gains over the first 9 years I held the fund.  Yahoo historical prices only goes back to 1980.  The fund has been managed by 4 different Fund Families (Lehman Bros, Salomon Bros, Legg Mason and finally Franklin Templeton).  FT does not go back that far and are only responsible for going back to 2012 by law.

[Bsch4477 · Accepted solution]

All you can do is use your best estimate and hope that the IRS will accept your reasoning if you are audited. 

[LudwigVan_fan · Accepted solution]

That is a difficult question and if you don't have the statements from back then even more difficult.  You say Yahoo historical prices go back to 1980, so you have some prices to go back to.  Do you know the original Ticker symbols of the fund through the years?  Might be able to get some data using those???

Also, in the shares gifted to you, basis would be what the donor's basis was.

Did you try searching at for mutual funds at the SEC?

Here is a link to Pub 550.  More in depth basis for mutual funds begins on page 43.

https://www.irs.gov/pub/irs-pdf/p550.pdf

One big problem is do you know how many shares were from re-invested income from the time you were gifted the shares to when you added to the fund?

If you can get say beginning, middle, and end of year prices for the funds in 1980 - 1987, you might use that to "average" the cost basis as a best estimate?

[AmyC · Accepted solution]

Since you were gifted the fund, your basis is the donor's basis for a starting point. All you can do is get as close as possible using what data you can for the year of the gift. Once established, make adjustments for stock splits, dividends, and capital distributions. See About Publication 550, Investment Income and Expenses page 39 for gifted details.

You should be able to do historical research to determine dividends paid so you can move backwards to your beginning basis. I am sure these were all DRIP (reinvested dividends) since you were young.  Once you determine a reasonable share basis for the starting point along with a reasonable price paid for those shares initially, you have your starting point. You have great data to use to make adjustments and get your correct final basis.

All you can do is your best. Remember, if the IRS decides to audit this area, they will also have to find historical records. So, if you have good, solid, reasonable, research showing your methods, that should be sufficient. 

[dmorsecode]

Thank you.  I'm relatively certain the symbol (SAIFX) has been consistent for over 50 years.  I've found dividend payout records, but not capital gains records.  Stock split wouldn't be applicable with a Mutual Fund - but is an excellent reminder for the IBM stock that I've held for just as long.  Great insight that the IRS has to perform the same research or rely on my own best effort.

[LudwigVan_fan]

Hi:  I was able to find on Yahoo the daily open, high, low, close prices for SAIFX (ClearBridge Large Cap Value Fund Class I) for 1/2/1980 - 12/31/1987

https://finance.yahoo.com/quote/SAIFX/history?period1=315705600&period2=567993600&interval=1d&filter...

You have to option to download into a spreadsheet.  I would do that, and get the average of the open and close amounts by day for each year. (All the days open, average, and all the days close, average)  Then apply that to the units before 1988.  Based on what you have stated so far, you don't know how many shares were issued either when you received the initial amount of shares, or the # of shares re-invested each year.  Perhaps using a little math, and the dividend rate, you might be able to back into units invested each year (or an approximation).  I'm not a mathematician, but there might be a formula that might work.

[DawnC]

Some general info on Mutual Funds and basis can be found at the bottom of this link.    It is not going to provide any of historical data you need, but hopefully the Yahoo link provided by our Champ above will serve that purpose.   

[Mike9241]

did you call the current fund manager to see if they can provide additional info?