Solved: How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?
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How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?

My Dad gave me some AT&T stock sometime between 1948 and 1962 (i.e., between birth and 8th grade) but I have no recollection or any records of this gift.  Dad passed away several years ago.  I received quarterly dividends and know the stocks split in the 1980s.  I ended up with 26 shares of AT&T and sold them through Computershare in July 2015.  Computershare used the FIFO cost basis method and the gross amount of sale was $907.  I did not get a form 1099-B and the Computershare sales form shows "N/A" for covered cost basis, etc.  How do I determine the cost basis to report any gain or loss to the IRS for Federal income tax purposes?


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Accepted Solutions
Level 15

How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?

You have to report the sale on your tax return. Lacking any cost basis, the IRS will consider the entire sale amount as taxable. So, you need to make your best effort to determine the original cost basis, even if (worst case) it's a guess. Historical prices of publicly traded stocks are  readily available on the internet and should, at least, satisfy the IRS that your basis wasn't zero; just "google" “Historical Stock Prices". I use http://bigcharts.marketwatch.com/historical/

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3 Replies
Level 15

How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?

You have to report the sale on your tax return. Lacking any cost basis, the IRS will consider the entire sale amount as taxable. So, you need to make your best effort to determine the original cost basis, even if (worst case) it's a guess. Historical prices of publicly traded stocks are  readily available on the internet and should, at least, satisfy the IRS that your basis wasn't zero; just "google" “Historical Stock Prices". I use http://bigcharts.marketwatch.com/historical/

View solution in original post

Level 7

How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?

Given the small amount of income involved, I would just use zero as the cost basis.  The actual cost basis probably isn't much higher than that, and the AT&T situation is extremely complicated because of the spin-off of the Baby Bells, and then the various mergers of the Baby Bells that essentially put them almost back together again.  The amount of effort involved in determining the cost basis probably isn't worth it, and the IRS will always be happy to take zero as the basis.

Level 15

How do I determine the cost basis and gain or loss for stocks I received as a child if there are no records?

I agree. There's a strong chance the gain is subject to the 0% capital gains tax rate.
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