How would I enter info in Turbotax for cost basis, purchase date etc. for Warner Brothers (WBD) spin off sale from AT&T on April 13, 2022 for 1099-B when purchase date and cost basis records are missing (broker doesn't have it and I don't have it)?

[hellotax1111]

How would I enter information in Turbotax for cost basis, sales proceeds, acquisition date, date sold, holding period and type of gain/loss etc. for Warner Brothers (WBD) spin off sale from AT&T on April 13, 2022 for 1099-B?

TD Ameritrade wrote "CIL Exact FIFO" by the Warner Brothers Discovery line item in the cost basis, which I think means cash in lieu for some of the fractional shares. 

A 1099 B was issued however, for some of the shares (.573 shares) there is no cost basis listed because it was purchased before 2011 (sometime between 1992-1995) from Quick & Reilly when brokers didn't require cost basis reporting and I don't have the records for it. 

https://liquidity-provider.com/news/how-to-ha[product key removed]-atts-spinoff-of-warnermedia/ 

https://ir.wbd.com/stock-information/Investor-FAQs/default.aspx

Thank you

[PattiF]

This link will help you find your cost basis for the AT&T shares that you purchased in the early nineties. Go to the section shown below which is just above the calculation section, and access the worksheets by using the click here link to find the cost basis. 

"If you acquired WBD shares as a result of the transaction, use this worksheet. If you acquired your AT&T, Inc. shares prior to March 20, 1998 (date of last stock split) or through a previous acquisition or merger transaction, determining your cost basis is a TWO-STEP process -- first  calculate your AT&T Cost Basis per share on one of the worksheets click here and then use that output for the allocation below."

[hellotax1111]

Thank you

1. If I do not know the exact purchase date since I cannot find records and broker doesn't have it. Can I estimate it? 

What happens if the date is accidentally wrong?

2. If I do not feel like calculating the cost basis since it is only for fractional shares, which is very small amount. Can I put cost basis=0?

[LindaS5247]

You can use "various" for the purchase date. You will need to tell TurboTax that your "holding period" is long term. 

"Various" is accepted by IRS because you are certifying with your signature that your cost basis for the shares sold is correct. Anything held more than a year is Long Term and goes on Form 8949 Page 2.

Yes, you can use $0 for cost basis on fractional shares.
 

Click here for additional information on how to determine a stock's basis.

[hellotax1111]

Thanks @LindaS5247 

-What would I put as the Sale Category and why?

Here are the options for Long Term:

Long Term Covered (Box D), Long Term Non Covered (Box E), Long Term Not Reported (Box F), Unknown Holding Period (Box X). 

-When would one choose "Unknown Holding Period (Box X)"

-Would the "Date Sold" be the date WBD spinoff fractional share was sold 4-13-23 (I didn't sell it but it was sold as a result of the spinoff since it was Cash in Lieu of Shares for the fractional share)?

[LindaS5247]

Long Term would be your sales category, because the purchase dates are over a year ago.

Box E Long Term Not Reported would be the correct selection. If they were "covered" the Form 1099-B would reflect this.

Yes, use the date sold of 4/13/22.

[hellotax1111]

Thanks Linda!

Why would it not be long term non covered  ? How do you know ti is long term not reported versus non covered?

[DaveF1006]

According to this screen under sales category, this would be considered a non-covered sale. I have included a screen shot illustrating this 

@hellotax1111 

[hellotax1111]

Thank you @DaveF1006 !

I can't see the screenshot unfortunately. 

@LindaS5247  had mentioned that it would be considered non-reported. 

-May I confirm if it would be non-covered or non-reported and why (so I understand your reasoning)?
-What are the implications if I accidentally put the incorrect one?

[DaveF1006]

After reading the entire thread of this post, this would be long-term not reported as LindaS5247 mentions since there no cost basis reported on the 1099B for some of the shares. My apologies.

The reason i know this is because this is how it is listed in the sales category screen that I will include below this post. Since the 1099B included no cost basis and the basis was not reported to the IRS, it is not reported.  The implications are at most minimal as far as the IRS is concerned.  It may or may not be an issue if you have a large number of stock transactions and declare a big loss.  If that is the case, it may raise a red flag in the event the IRS examines your return and finds that no stock basis has been reported to them and not reported to the IRS. Also, if you report these as non-covered, this assumes that there was basis reported on the 1099B when there wasn't. his may raise an eyebrow if you were audited although i have never experienced this in my years of tax preparation.

What is mostly critical to you however is if these are long -term or short term gains because long term gains are taxed as capital gains while short term gains are taxed as ordinary income.

Hopefully i have given you some insights that you may find useful. Here is the screenshot that i promised you in my last post. If you click on the learn more tab, this will tell you what all these categories mean.

@hellotax1111 

[hellotax1111]

Thank you @DaveF1006 !

so I hadn't realized this before which is why I was asking for clarification on what to put for SALES CATEGORY. But when I just looked at "Learn More" again it says that at the top of each section of the 1099 it labels the type of stock it is. I didn't see it before. However, I see now that for the stock that is in the section with missing cost basis, there is a header above it that says "Undetermined Term Transactions for NonCovered Tax Lots" and then it says " Report on Form 8949 Part I with Box B checked or Part II with Box E Checked. Basis is NOT provided to the IRS." 

Based on the above it would actually be considered "Long Term Non-Covered" not "Long Term Not-Reported" as you and Linda had mentioned. 

The stock IS listed on the 1099 with a quantity, proceeds and date sold but NO Cost Basis. Under "Learn More" the definition of 'Long Term Non-Covered" does seem to match what is being recommended at the top in that if there was NO information at all for the item for this stock with missing cost basis on the 1099 then it would be "not reported" but since there is some information such as sales date it would be considered "non-covered."

However, this contradicts what you were suggesting that since the cost basis wasn't reported it would be "Long term Not reported."

-Based on the new information above do you agree it is "Long term Not Covered?" Please note that I am not able to find my original records and they did not transfer to the broker. However, the stock was purchased from AT&T more than a year ago (many years ago). 


-Since I don't have the purchase date in my personal records, would you recommend I still put "various" for the purchase date in Turbotax?

-There is a section in Turbotax that also asks about  "less common adjustments that apply" for example  includes the following options "loss from this sale is disallowed due to wash sale rules" or "an adjustment is required for a reason not already covered." Information for those less common adjustments are blank on the 1099 and at the top of the section under the header it says:

“Date acquired,” “Cost or other basis,” "Accrued market discount," "Wash sale loss disallowed" and “Gain or loss (-)” are NOT reported to the IRS.


I don't have the information on my 1099 to determine if any less common adjustments apply. Is it ok if I leave those blank since I don't know and don't know how I would know and what are the implications if it is incorrectly blank?

[DaveF1006]

In my very last post before this, I did retract my earlier suggestion and suggested that you report long-term not reported. This is the correct category to use regardless on which date it was sold.

Since you do not have sales records, you may use various. It is also acceptable to leave blank those areas that are not reported on your 1099B. You are not responsible nor is it advisable for you to  report that information on your own. This includes all uncommon adjustments.

@hellotax1111 

[hellotax1111]

Hi Dave 

yes I did see that you suggested putting long term not reported at the end. That’s why I said it contradicts what I am finding in learn more which is to put long term non covered.

Could you please confirm the correct category after reading what I wrote there?

I am a bit confused now 

thanks for your help 

[doug23314]

How much money are you talking about to begin with?  My wife CPA ran into a similar problem and did a long spreadsheet computation to figure out the cost basis.  Like you, she didn't have the info so she worked from the monthly statements she had.   Honestly, you may not like my answer but if the amount of money is not a lot, I'd say just do the best you can do and let it go.   I mean if they want to audit you, let the IRS tell you the cost basis then.  Sorry if my answer isn't the academic answer you might expect.  I'm not saying to make up a number but rather give it your best computation and go with it.   If you get audited, at least you can show them what you did and let them tell you the correct number.

[DaveF1006]

Yes, I still stand by my answer that it should be reported as long term not reported. In careful analysis, though if you report this as long term non-covered, this will not negatively impact your return. 

@hellotax1111