I owned shares in Company A which was bought out by Company B.
As part of the buyout, I received $2.30 for each share of Company A that I
owned. I received a 1099-B for this transaction. There were three line items. One
for long term covered shares (reported to the IRS), one for short term covered
shares (also reported), and one for “uncovered” shares (which were definitely
long term). For the two covered transactions, which the Basis was reported to
the IRS, the sales proceeds equaled the cost basis. For the uncovered share
transaction, only the sales proceed is listed. Also on the 1099-B there is
reference to Applicable check boxes for Form 8949. For the uncovered
transaction, there is an X, for the long term covered transaction there is a D,
and for the short term transaction it is A. It appears I need to enter this
info as part of figuring out entries for Schedule D. I have successfully
entered the information into TurboTax for the two covered transactions, but not
so for the uncovered one.
So my questions are:
1.
Why is it that the cost basis equals the sales
proceeds for the two transactions, when my actual cost basis is different? Does
this have to do the way a company buyout is viewed?
2.
What do I do about the uncovered transaction? Do
I assume the cost basis is the same as the sales proceeds as was done for the
other two transactions and just enter that on Schedule D and/or 8949? Or do I
need to divine a cost basis from when the shares were bought 20+ years ago and
for which I have no record? When attempting to enter information into TurboTax
for the uncovered transaction, I get flagged for not entering the cost basis
for box 1e. Then after choosing the X for the Sale Category, which is defined
as unknown holding period, I am prompted to choose Long term or Short term type
of gain or loss. So do I choose long term because I know personally that it is
long term?
