How do I figure the cost basis of my stock?
I have some shares of stock my mother gave me. I recently sold some to help pay some bills. I can't ask her about it because I don't want her to know I sold it. She was given this stock by her father and the company has been sold twice since she got it and it has split a number of times. It is not worth as much today as it was 5 years ago. This has been in the family about 45 years. How am I ever going to know the cost basis? Is there some kind of software that can do this?
- John WLv 710 years agoFavorite Answer
The cost basis is how much you paid for it which in the case of a gift is zero. However, that's assuming that the giver wrote it off as a total loss. You should probably ask a tax accountant for some direct advice on this, I believe that Turbo Tax and TaxCut gives you access to 1-800 and online chat for such questions. In theory, the government is only entitled to taxing the difference between the sale price and the original purchase price and chances are that the value of the gift was not declared hence no gift taxes had been paid. You could perhaps look up what the price was generally 45 years ago with something like Yahoo finance's historical quote, print out the data as evidence and use that as the cost basis, showing the data if challenged. The taxation system is voluntary in that you say how much your cost basis is and if they disagree, they'll ask you to prove it to them as best as you can. You might be able to get away with saying that the stocks were sold at a loss since technically you're not required to report a loss, just collect a sufficient amount of information regarding the company's history and file it so that if you are audited, you can present a reasonable argument for why you think it was at a loss.
I'd be more concerned with this selling some to pay some bills concept. This means that you are not balancing your budget and have a serious cash flow problem and you need to focus on same basics. They say to save an emergency fund before you invest, this is because it's never good to make an investment decision simply because you needed money. You need to take this seriously, your budget has to be in good shape or you're just in a downwards spiral regardless of resources.
- dinardiLv 44 years ago
you don't love it to be 0. in case you;d ever promote it, you would nicely be crucified by making use of taxes on the benefit. "adjusted" potential,what changed into the fee on the day it changed into gained. celebration, the corporate is nicely worth 50,000.00. There are 10 stocks of inventory, entire. you're given a million share.. that's nicely worth 5000,.00 "adjusted." start up by making use of asking your uncle.
- clayjar_aznLv 710 years ago
Only your mom knows. Or you can be a detective and look for very old documents that are 45 years old. The broker is most likely dead.
Fess up. She did give them to you so you can do whatever you want with it.
- Anonymous10 years ago
The value of the stocks at the time they were given to you is your cost basis, I believe.