Date Acquired Missing and Cost Basis "Not Provided" for 1099-B

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Hi all,

I've been quite confused about how to report my 1099-B. I imported them directly from Charles Schwab, but the date acquired is missing, and the cost basis for this security is "not provided." They are short-term transactions for which basis is missing and NOT REPORTED to the IRS. I reached out to my finance advisor, and he recommended to indicate the cost basis was the same as the proceeds, and the date acquired as various. These "bonds" were acquired before they were at Schwab, and they were inherited and then gifted to me (gifted this year, inherited years ago). I have no way of determining the cost basis at this point. Is my advisor's plan a good plan to follow? Or is there more I need to do?

Thanks in advance.

[ToddL99]

You must make a good faith effort to determine the cost basis - in this case, it will be the value of the bond on the date it was inherited from the original owner. If they were gifted to you this year, ask the person who gave them to you when he/she inherited them.

Even if you only have an approximate year for when they were inherited, that shows good faith - you can use the average price of the bond for that year.

Once you have an acquisition date (or range), consult your accountant or broker, or go online to fee-based services or free services that provide historical stock and bond prices to find the price as of that date. The investor relations unit of the entity issuing your securities may have historical price information. 

If you have a range of possible purchase dates, find the average price of your stock or bond during the date range. If you only have a purchase year, find the average price during that year. 

See How to Find Unknown Cost Basis of Bonds & Stocks for additional information and a discussion of the subject.

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Thank you for the answer. 

I still don’t quite understand how I would go about this, given it is a bond I believe. My broker has been absolutely no help. Trying to determine the cost basis has been nearly impossible. It is Freddie Mac 6.5%23, which I take to mean 6.5% and matures in 2023, but how would I find the cost basis of that? I know when it was gifted and when it was inherited by the gifter, and Freddie Macs website has a historical lookup for “common stock,” but that wouldn’t be common stock, would it? When I search for cost basis of a bond, it gets even worse because it says the brokerage firm is required to reported the cost basis if acquired after 2014, but technically this bond was purchased probably a decade or so ago, yet I only acquired it this year. Would that mean they are required to report it since I acquired it this year? Or that they are not required to since it was first acquired before 2014?

I apologize for my huge level of ignorance. I have been researching this for over a week and cannot find an actual answer that fits my situation. Thank you again for any assistance or clarity you can provide.

[WendyN2 · Accepted solution]

No, they are not required to as this bond purchase was before the time of having to report such information. It is no easy task so please do not be so hard on yourself! As was previously suggested to you, you must make a good faith effort in determining cost basis at date of transfer to you - HOWEVER - given that it was inherited, it is required to be reported, but it is a non-taxable item. Therefore entering sales price as cost basis is just what you should do so that the transaction nets out to zero (as your advisor had suggested). For the date, TurboTax system does not accept "various" as a response in that field. Since you know it is a short term sale, just enter any date (truly, this is legit) prior to the date of the sale and that way it will properly be categorized on your Schedule D as a short term sale.