Undetermined Term Transactions for Noncovered Tax Lots

[KGDM55]

Looking for guidance on how to properly enter a transaction from TD Ameritrade in the above subject category. I imported data from TD into Turbotax, but there are blanks in the 'Date acquired',  'Cost or other basis' and 'Gain or Loss' fields. Transaction proceeds were $144.17, but there is no way to determine the cost basis. I believe this to have been a long term transaction because footnote line 5 says: "if checked, the securities sold were noncovered securities and boxes 1b,1e, 1f, 1g and 2 may be blank. Generally, a noncovered security means: stock purchased before 2011, stock in most mutual funds purchased before 2012, stock purchased before 2011, stock in most mutual funds purchased before 2012, debt acquired before 2014. options granted or acquired before 2014, and securities futures contracts entered into before 2014." Additional information for the transaction sold 1/20/22 says: "Proceeds from sale of rights".

Any suggestions on what cost basis I should use? Could be a gain or a loss - no way to tell.

[Bsch4477]

Only you can determine the cost by records or looking up historical data. If you don’t have any idea the IRS will consider it to be zero. 

[DianeW777]

It depends.  There are many websites available to help you find the cost basis of your stock.  You will need to find the purchase dates as close as you can find. Simply type in your browser 'historical stock values' and you can use this link provided to get started.

• Where can I find historical stock quotes?

It is up to you to find the answer, keep all of your research as proof of how you arrived at the cost basis.

@KGDM55 

[mvyfan]

I ,too, am having the same issue. I believe you may be referring to the Tencent special dividend for the distribution of JD.com shares.

I have read in other messages in the TT Community to state 0 (zero) as the cost basis. Further reading indicates that this distribution was a "return of capital (ROC)", thus, not a sale that would require a cost basis.

See: Solved: Re: UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS on ADR Dividends (intuit.com)

I am also getting an error in TT asking me to enter the "Date Acquired" - but since this is a ROC and not a sale - I don't see why that info is required. It allowed me to enter "N/A" in the Capital Gain worksheet but "N/A" is not acceptable in the Capital Asset worksheet. Are you having this problem also?

Hope some of this info helped.

[KGDM55]

Yes, my issue was with Tencent. Showing the cost basis as zero basically ensures that you don't underestimate taxes due. Since the amount of my tax on this distribution was on the order of $20 it was just not worth my time and effort to pursue further. Regarding the dates, you just have to establish whether it was short term or long term gain. In my case, the brokerage notes indicated this was clearly long term so I just made up a date in this timeframe, consistent with the brokerage notes. Short term would be for assets held less than one year I believe.

[DianeW777]

Yes, you are correct.  And I agree that $20 may not have any real effect on your tax liability to warrant lots of research.  Your time is valuable too.

• Long term gains, defined as those held for more than one year, generally have more advantageous tax characteristics than short-term gains, which are held for one year or less.

To enter a date acquired when you aren't sure you can simply use 'Various', then select your holding period. In TurboTax Online you must select 'Something other than a date'.

@KGDM55 

@mvyfan 

[pbs2bz]

This was not a stock sale!

[sadesai]

Re: How do I report a CUSIP item with proceeds from a sale of rights when the date of sale questi......

[Hardway]

Just wanted to follow up. I was wondering how you handled it on your 2022 tax return. Thank you!