Report proceeds from sale of equity interest

[jmk1979]

Hoping I can get some direction from the community on how to report proceeds from the sale of equity interest.  For background, I was gifted a small 1% in my former employers S-corp.  I resigned from the firm three years ago and received a note at that time for a full payout on the value of my 1%, which I received in March of 2024.  I have not received a K-1 for three years now and have not received anything else other than a spreadsheet showing shareholder loan balances for prepaid distributions.  I'm not sure where to report the proceeds I received from the sale of equity interest.  Since it was gifted, do I have a cost basis?  Any help is greatly appreciated.

[RobertB4444]

You'll report this as the sale of an investment, as though you had received a 1099-B for it. 

In the wages and income section of your federal return scroll down to 'Investment Income' and click start next to 'Stocks, Bonds, Cryptocurrency, Other' (you're the other).  

Enter the sale as sale date of the date that you received the check and purchase date as the date that you were gifted the interest.  Sale price is the amount that you received.  Basis, or purchase price, is tricky.

If the interest was gifted to you and not purchased in any way then the basis would have transferred from the gift-giver.  So whatever basis they had in the property at the time that they gave it to you transferred with the gift.  

If you can't figure out what that was then you may have to go with zero.

@jmk1979