If I have long term capital gains from selling something, but I have zero records for cost basis or date of acquisition, is it okay to simply report it as zero cost basis, and long term capital gains? Would I need to prove it as long term gains? If it is a large sum of money, can you get into trouble if you cant prove cost or purchase date?
You would pay the most tax if your cost basis was zero, so you aren’t going to get in trouble for reporting a zero cost basis. If you claim anything else as the cost basis, you have the burden of proving if audited, and if you can’t prove it, the IRS is likely to set the cost basis to zero so that you pay maximum tax. Claiming zero now is a defensive strategy that can’t get you in trouble, which will result in paying more tax but taking less risk than guessing an approximate basis and waiting to see if you get audited.
And as for long term, You don't know if you bought it less or more than a year before the sale? You should be able to get bank or some other records showing if you bought it within the last year.
the IRS could challenge the long-term treatment. they'll never object to using $0 as cost. you haven't stated what you are selling so we can't provide any ideas as to how to support the L-T treatment. however, you should try to find any documentation that would support that position. you'll only need it if the IRS audits and asks for proof it was held long-term.