So I imported my brokerage account into TurboTax last night. It said it needed the cost basis for a sale. I looked at the Form 8949, but I dont have enough information on how to calculate it. Basically it was a automatically purchased on the same date, with a sales amount of $1,333. In the description is says "0.10 STARZ XXXMandatory Merger Eff: 12/09/16"
This was due to a settlement to the investors claiming the acquisition price of the purchasing company was undervalued.
Cost basis is the original purchase cost of an asset. When you sell the asset, your cost basis gets subtracted from the money you collect from the sale. Instead of paying tax on the full amount, you only get taxed on the profit (the selling price minus the cost basis).
If you know when the stock was purchased, use this link for tips to help you determine the cost basis. There is a link at the bottom of the article if you don't know the date the stock was purchased.
I understand how to calculate the cost basis under the normal circumstances. However, I sold that stock years ago after the merger. So my cost basis was already 'used' when I filed taxes that year. This transaction last year was a payout for a law suit settlement on the merger stock price. I didnt buy any stock, I was just awarded this amount and it came in the form of a one time purchase/sell transaction. In fact, that stock didnt exist when the transaction occurred.
I'm sure I've missed something here, but not sure how to move forward.