This is likely too complicated a question to get a complete answer here, but if somebody can point me to a 'selling stock for dummies' or something sight. I appreciate it.
When we got married some 30 plus years ago. My dad gave us four thousand dollars and a t and t stock as a gift. It is spun off stuff left and right over the years. I believe some of the stocks that spun off have spun off themselves.
Recently we received spun off warner brothers stock and I decided to sell it. Turbotax was very nice and imported the info but it's asking me to review things. One question it asks is if I received the stock as a gift and if so , it starts o ask me all sorts of other questions about a cost basis that i'm not prepared to answer.
Would this Warner brothers spin off be considered a gift since it was a spin-off of another stock yhat spun off of the original at&t gift?
Maybe I need an accountant but I hate to do so considering the sale of the stock was a wopping "$200 and the 1099b indicates I had eighty seven dollar loss.
Thoughts?
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In view of the complicated history and small amount at issue I would just report a zero basis in the stock and be done with it.
Do you know how your broker obtained a cost basis for your Warner Brothers shares? When stock is gifted to you, your cost basis is the same as the person that gave it to you. My wife had some AT&T stock that was given to her as a child by one of her grandparents. There had been so many spin offs and mergers that I determined I could never determine the cost basis. So I donated the stock, since you don't need to know the cost basis to take a deduction for the full current value. I bought new shares and my wife never knew.
I suggest you answer that you purchased the stock, use a cost basis of zero and use "various" as the acquisition date.
What is the implication of putting zero as the basis?
As an fyi the 1099b shows a cross basis which I'm guessing is the value of the stock when it split? That vs what it sold it for seems to have resulted in a small.loss.
If I say it was not a gift It was a gift if I don't think it asked any further questions and just uses whatever was important on the form.
If you use a $0 cost basis, all the proceeds will be capital gain. You would pay the most tax if your cost basis is $0, so there would be no inquiries. If you claim anything else as the cost basis, you have the burden of proving if audited. Reporting $0 now will result in paying more tax but taking less risk than guessing an approximate basis and possibly receiving an inquiry.
The basis of securities you receive as a gift depends on whether your ultimate sale of the stock produces a profit or loss. If you sell for a profit, your basis is the same as the basis of the previous owner. In other words, the basis is transferred along with the property. If you sell for a loss, though, the basis is either the previous owner's basis or the value of the stock at the time of the gift, whichever is lower. In other words, you don't get to write off a loss that occurred while the donor owned the securities.
Well, I certainly can just put a cross basis of 0 as the $200 is not going to significantly impact on my taxes. However if I decide to sell.my split comcast that's gonna be a far different story.
If I look back I believe from the tables I've seen the stock was at approximately $22 a share. And we had we're given four thousand dollars as a wedding gift. I should have this paper somewhere temperature all this..about 189 shares. Knowing that. How the heck do I know the cost basis of these 18 shares of Warner brothers some thirty plus years later.... I would assume the math would be the same if I ever sold my comcast.
Gifted stock and stock splits, when you don't know the purchase date and/or basis, can get messy. But if you know when the stock was purchased, it is much easier to find the cost basis:
Thanks al,
Dawn,
I know the month the stock was gifted, the number of shares and the value in whole that day. Let's say 181 shares at 22 each back in 1989.
I know the date of the Warner split, the number of shares, price etc. I know when I sold them as it appears on the 1099b...thought on two separate lines for some reason. Let's say the 18 shares were at $16 each when spun off a year and at $12 each when sold....made up but for illustration...I don't have the form with me at the moment.
I think the recent sale of Warner and the 1099 reflects the difference between the spin off date and sale date a year later and the cost basis reflects those 2 dates and $. But since the Warner was a spin off of the gifted AT&T I think I need to adjust the cost basis.
If I have all this correct, I think i have the info I need to determine the cost basis for the Warner sale...I am just not sure how to compute it.
The problem is that the cost basis of the stock is not the value when it was gifted. The cost basis is the cost basis of the one who made the gift. You are not going to know that.
I hear you but i cant imagine someone who was gifted stock that perhps trippled in value over 30 years just puts in a basis of zero...
Neverthelss if i find out when my dad purchased them and let's say Let's say theybwere bought at bought at $13 a share....knowing that... how would I calculate the basis.
The cost basis of stock you received as a gift ("gifted stock") is determined by the giver's original cost basis (what they paid for it) and the fair market value (FMV) of the stock at the time you received the gift. If it's not possible to determine what was paid for it or the date it was purchased, the FMV at the time you received the gift may be the best estimate to use as the basis.
See this help article for more information from TurboTax on determining the basis of gifted stock.
See this help article for more information from TurboTax on determining the original purchase price. For example, view the historical section at Marketwatch or Nasdaq, or Yahoo Finance.
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