How do I figure cost basis for stock given to me at birth?

[Anonymous]

I got stock from relatives when I was a baby. Dividends have been reinvested quarterly now for almost 50 years, and I've paid taxes on that since I was 18 or so and could file my own taxes. I don't have original stock certificates. How do I figure out basis since all these dividends have been reinvested for decades? Is there an easy way?

[Anonymous]

When we've sold stocks it gives you the option to use the average cost basis (which they calculate). If you choose to sell specific shares you will need to determine the cost basis - you should look up the rules on how to do that. We've always just chosen the average basis.

[Anonymous]

I sold some stock that I was given in 1997. The stock had gone up 100x...I assumed a cost basis of zero (the purchase price of the stock was probably 10K, I sold it for about 1 mil, but could not prove the cost basis easily.

[Anonymous]

I couldn't prove it in a similar situation, though only 30 years, not 50. I just declared the whole thing as gains with no basis. My dad "though" he paid in the neighborhood of $1500. But had nothing to show it, plus reinvested dividends over 30 years....I just didn't have the time or patience to try to figure that out.

[Anonymous]

There are sites that will calculate that for you-- your broker might be able to do it. Or wait to you die and your heirs don't have to worry about it (unless the billionaires succeed in abolishing the estate tax in the meantime).

[Anonymous]

You don't know if someone bought it or gave you stock they'd already owned?
Basically, you claim $0 as your basis.

[Anonymous]

Anonymous wrote:I sold some stock that I was given in 1997. The stock had gone up 100x...I assumed a cost basis of zero (the purchase price of the stock was probably 10K, I sold it for about 1 mil, but could not prove the cost basis easily.

Wow,Mehta stock went up 100x?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I sold some stock that I was given in 1997. The stock had gone up 100x...I assumed a cost basis of zero (the purchase price of the stock was probably 10K, I sold it for about 1 mil, but could not prove the cost basis easily.

Wow,Mehta stock went up 100x?

Not Mehta - what stock?

[Anonymous]

Anonymous wrote:You don't know if someone bought it or gave you stock they'd already owned?
Basically, you claim $0 as your basis.

That might make sense for the initial purchase, but what about all the dividend reinvestments, which would might be at higher levels? 0 basis would mean paying taxes twice, which isn't a good strategy. I'd be surprised if the statement from the company doesn't include the average cost basis.

[Anonymous]

Anonymous wrote:I got stock from relatives when I was a baby. Dividends have been reinvested quarterly now for almost 50 years, and I've paid taxes on that since I was 18 or so and could file my own taxes. I don't have original stock certificates. How do I figure out basis since all these dividends have been reinvested for decades? Is there an easy way?

I ran into this with my wife. The record keeping was non-existent.

If you know how many shares you have today, and you have the approximate date of when the shares were purchased, there are calculators out there that'll tell you the price on the purchase date (you can simply average the open/close) for your buy price...

The reason those calculators are important is if the stock was split over time (very common in the 90s / dotcom bubble). Basically 10 shares at $10, under a 1>2 split, becomes 20 shares @ $5.


Once you know the adjusted shares/price, you just calculate the gain (or loss)... and I'm assuming it's all LTCG taxes... so apply to your bracket (0, 15, 20%? - don't quote me).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I sold some stock that I was given in 1997. The stock had gone up 100x...I assumed a cost basis of zero (the purchase price of the stock was probably 10K, I sold it for about 1 mil, but could not prove the cost basis easily.

Wow,Mehta stock went up 100x?

Not Mehta - what stock?

10,000%
Not even APPL has done that well since 97, so I doubt it.

[Anonymous]

Anonymous wrote:I got stock from relatives when I was a baby. Dividends have been reinvested quarterly now for almost 50 years, and I've paid taxes on that since I was 18 or so and could file my own taxes. I don't have original stock certificates. How do I figure out basis since all these dividends have been reinvested for decades? Is there an easy way?

Yahoo Finance.
Put symbol in, left of the chart is"Historical Prices".

[Anonymous]

Anonymous wrote:

Anonymous wrote:I got stock from relatives when I was a baby. Dividends have been reinvested quarterly now for almost 50 years, and I've paid taxes on that since I was 18 or so and could file my own taxes. I don't have original stock certificates. How do I figure out basis since all these dividends have been reinvested for decades? Is there an easy way?

Yahoo Finance.
Put symbol in, left of the chart is"Historical Prices".

p.s the prices will already be adjusted for splits.

[Anonymous]

You probably can't even use those calculators. It isn't that you have to figure out the basis as if you bought on your birthday. You have to know what the person who gave you the stock's basis was - as a gift recipient you inherited their basis.

Have you considered donating the stock? You can take a donation for the full current value and avoid this issue all together. Obviously, less money for you than if you sold it and paid tax on the whole thing, but if you were planning on giving to charity anyway, this is a good way to do it. You can even donate the stock into a donor advised fund, take the full deduction, and disburse the funds over several years or to several charites.