On the 1099-B, under "other transactions"- form 8949,(X)" there is an transaction listed as "exchange". It has a value for "proceeds" but no other. How do I enter this?

[MarilynG · Accepted solution]

If the Cost Basis or Holding Period (long or short term) is unknown by your broker, your 1099-B shows a Code X to indicate that.

If you can determine the Purchase Date and Cost from Transaction Statements you have received, you can enter it.  You can also enter 'Various' if that applies, but the entry can't be blank. 

If this was inherited, the Cost would be the value on the Date of Death, and the Purchase Date would be Date of Death. 

You can also choose 'Short Term' or 'Long Term' for Box 2 if this is known to you.  If not, the sale is automatically considered 'Short Term'.

If no Cost (or average cost) can be determined, enter $0 in Box 1e.

If your broker can't provide you with this information, you may be able to do a Historical Search for Cost Basis at:

http://bigcharts.marketwatch.com/symbollookup/symbollookup.asp

[adu221183]

@mando_2000 : How did you took care of this on your tax return? Asking because I am having same problem. I am not able to determine short or long term and also Cost. My 1099-B says mark X on form 8949 for Unknown Term. Appreciate your help.

[GeorgeM777]

What is the name of the security on the line in question?  On some 1099-Bs, an "X" may be an activity code to designate a transaction that has expired; however, your 1099-B seems to indicate something else.  Providing the name of the security in question may help us in trying to assist you further.

adu221183

[adu221183]

The funds in question are Cash in Lieu. As per my broker they refer to funds received by investors following structural company changes. These do not have a purchase date or term gains or losses. Now I am confused on how to report them on 8949 form? Appreciate your help.

@GeorgeM777 

[GeorgeM777]

This could be cash in lieu of a fractional share.  Some companies will issue cash to shareholders rather than issue fractional shares.  If that is what happened here, the amount in question would still get reported on Schedule D, and maybe Form 8949; however, to report such information requires additional information, e.g. sale date, price per share, all of which you do not have.  

What is the name of the stock in question?  The missing information might be available on the company's website as it is highly unlikely that you are the only one to have received cash in lieu of a fractional share.  

In the end, if the information is unavailable, there is always the option of reporting zero for the cost basis of the fractional share; however, before taking that step, let's see what we can find out from the company that issued you the cash.  

@adu221183