Reporting capital gains when brokerage does not exact cost basis

[abhishekguglani]

I need help with capital gain tax reporting. I transferred some company stock lots, which were vested at different times and have different cost basis, to a new brokerage. The cost basis was not moved over. Not knowing this I sold a few of the stocks. Now I don’t know which exact lot was used for the stock sale to be 100% sure of the cost basis I need to report when I file my 2022 return. Here is a the scenario to explain:
• Account 1 had 20 stocks vested on Day 1 @ $100, 30 stocks vested on Day 10 @ $200 and 40 stocks vested on Day 20 @ $300
• Now I transferred all the 90 stocks to Account 2. When I go to Account 2, I see 90 shares to sell and no cost basis information. I sold 50 out of 90 @ $10.

Now I don’t know which of lot 1, ($100), lot 2 ($200) or lot 3 ($300) stocks I sold. And as a result I don’t know the exact cost basis for the 50 stocks I sold. What should I do in this situation?

[rjs]

The default assumption is FIFO - first in, first out. In other words, you sold the oldest shares first. So the 50 shares that you sold were the 20 Day 1 shares and the 30 Day 10 shares.

There is a procedure for designating the specific shares that you are selling. But if the new brokerage does not keep a record of the separate lots, that procedure won't work. Also, to use this procedure you have to tell the broker, at the time of the sale, which lots you are selling.

[fanfare]

When the broker does not have your basis or has the wrong basis, you have to report the basis from your own records.

Having sold some shares, you must continue to maintain a detailed record of the basis in the remaining shares.

@abhishekguglani 

[Mike9241]

the IRS has specific instructions for reporting correctly 

you need to enter B as the adjustment code.

• If this transaction is reported on Part I of form 1099-B (8949) with box B checked at the top or if this transaction is reported on Part II of form 1099-B (8949) with box E checked at the top, enter the correct
basis in column (e), and enter -0- in column (g).
• If this transaction is reported on Part I of form 1099-B (8949) with box A checked at the top or if this transaction is reported on Part II od form 1099-B (8949) with box D checked at the top, enter the basis shown
on Form 1099-B (or substitute statement) in column (e), even though that basis is incorrect. Correct the error by entering an adjustment in column (g).