Taxes/Cost basis on NOT COVERED share
As you know, financial institutions are not required to report COST BASIS of shares prior 2011 to the IRS. However, according to what I read, one must still pay taxes on these share if one sells these shares.
I started buying shares of stock in 1987, reinvesting the dividends and held the stock. In 1994 I sent the stock certificates to Northwest Bank, who later became Wells Fargo who later turned the share over to ShareOwnerOnline. Because I could now access my information online, I no longer kept dividend reinvestment information on my own. Life got in the way and I always thought that I could obtain this information if I needed it.
I am ready to buy a Charitable Gift Annuity and need the COST BASIS of the shares. ShareOwner Online says that they can not/will not provide it because they are not required to do so.
How do I go about figuring out my COST BASIS on shares of stock that had their dividends reinvested and split? Obviously, I paid taxes on the dividends each year (1099-DIV) but the stock remains in the account. Sometimes I would take the dividend as a check but mostly it was reinvested.
There are no records between 1995 and 2011. How do I figure out my COST BASIS?
Terry Says
Ugh. I don’t have a good answer for you. The obvious answer is to NOT sell the stock, but leave it to your heirs. In that case– under current tax laws — there would be a step-up in cost basis to the value on the date of death — and if they immediately sold the stock, there would be NO capital gains tax at all.
But who knows how the tax laws will change — and that doesn’t help you get an income from this charitable gift annuity, which is the entire purpose.
I assume you’ve read the reasons WHY you need a cost basis: Tax Aspects of Gift Annuities | PG Calc
Without records, I would suggest you just go back to your original purchase year — if you know that. YOu should be able to go back to old stock charts to see the price range for that year. Then choose a mid-point as your cost basis — since you did not actually purchase more shares, and paid taxes on any cash or stock dividends in the intervening years.
To find that historic purchase price on a chart go to this website and insert the stock symbol, then instead of the default “one-year” chart, adjust the range to “all data.” That should give you a close approximation of the cost of your original investment. BigCharts: Stock Charts, Screeners, Interactive Charting and Research Tools (marketwatch.com)
