how to get cost basis on old stock

How do I find a stock's cost basis?

• Sign in to your brokerage account. Although your broker may not include your basis on your 1099-B, it doesn't necessarily mean they don't have it.
• Look at previous broker statements. Review your records for the trade confirmation when you bought the shares. ...
• Contact your brokerage firm. ...
• Go online for historical stock prices. ...
• Go directly to the source. ...

Full Answer

What is the cost basis for selling shares of stock?

The Internal Revenue Service (IRS) says if you can identify the shares that have been sold, their cost basis can be used. For example, if you sell the original 1,000 shares, your cost basis is $10. If you can't make this identification, the IRS says you need to use a first in, first out (FIFO) method.

How do I determine the tax basis for a stock?

Some companies, like AT&T, have a special Web page just for tax basis information, which includes a link to worksheets that can help you figure out your basis -- a tricky task if the company has had any spin-offs or mergers since you bought the stock.

How do you calculate cost basis for stock splits?

How Stock Splits Affect Cost Basis. You can calculate your cost basis per share in two ways: Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per share cost basis ($10,000/2,000=$5.00).

What factors affect the cost basis of a stock?

A variety of factors affect the cost basis of a stock, including commissions, stock splits, capital distributions, and dividends.

What do you do if you don't know the cost basis of a stock?

First of all, you should really dig through all your records to try and find the brokerage statements that have your actual cost basis. Try the brokerage firm's website to see if they have that data or call them to see if it can be provided.

How do I find the cost basis of an old stock certificate?

You'll need to find a record of the purchase date and price of the stock you hold. This is the tough part since it's the key piece of information to establish the cost basis. Nobody would know this except by looking at any available records showing the purchase date and price, or perhaps old tax records.

How do you calculate missing cost basis?

Subtract the amount paid at the time of purchase from the amount received at the time of sell to determine your missing cost basis.

How do I find out the cost basis of a stock?

You can calculate your cost basis per share in two ways: Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per-share cost basis ($10,000/2,000 = $5).

How do I find the purchase date of a stock?

The trade confirmation or brokerage statement from when you purchased the stock will show the purchase date. If you no longer have the confirmation or statement, the brokerage firm that handled the purchase for you should be able to tell you the date.

What is covered and noncovered cost basis?

For tax-reporting purposes, the difference between covered and noncovered shares is this: For covered shares, we're required to report cost basis to both you and the IRS. For noncovered shares, the cost basis reporting is sent only to you. You are responsible for reporting the sale of noncovered shares.

What if my 1099-B does not show cost basis?

The Form 1099-B you receive may only report the date of the sale and the sales proceeds amount. If it does not report the date acquired or cost basis, you must still enter that information on Schedule D and/or Form 8949. As a result, you should keep and maintain this information with your tax records.

How do I prove IRS cost basis?

According to the IRS, taxpayers need to keep records that show the tax basis of an investment. For stocks, bonds and mutual funds, records that show the purchase price, sales price and amount of commissions help prove the tax basis.

Why is some cost basis not reported to IRS?

Short Term sales with cost basis not reported to the IRS means that they and probably you did not have the cost information listed on your Form 1099-B.

How do I know if basis was reported to IRS?

Sample of Form 1099-B 1545-0715) SHORT-TERM TRANSACTIONS FOR WHICH BASIS IS REPORTED TO THE IRS–Report on Form 8949, Part I, with Box A checked. Section A indicates whether the cost basis for the transaction was reported to the IRS and if the transaction is a short-term or long-term transaction.

How do you calculate stock basis after a spin off?

Multiply the individual stock proportions by your original cost basis. If your original cost basis was $120 per share and the spin-off receives a 40 percent cost basis allocation, the net cost basis for the spin-off will be $48. The remaining $72 in cost basis is allocated to the original company.

How do you calculate the cost basis of a stock with multiple purchases?

To find your total cost basis for your investment with multiple purchases, add the individual cost basis for each share you own. For example, if you own three shares in Company XYZ, one bought at $10, one at $15, and one at $20, your total cost basis is $45.

How to calculate cost basis per share?

If the company splits its shares, this will affect your cost basis per share, but not the actual value of the original investment or the current investment. Continuing with the above example, suppose the company issues a 2:1 stock split where one old share gets you two new shares. You can calculate your cost basis per share in two ways: 1 Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per-share cost basis ($10,000/2,000 = $5). 2 Take your previous cost basis per share ($10) and divide it by the split factor of 2:1 ($10.00/2 = $5).

What factors affect the cost basis of a stock?

A variety of factors affect the cost basis of a stock, including commissions, stock splits, capital distributions, and dividends. Several issues that come up when numerous investments in the same stock have been made over time and at different price points; if you can't identify the exact shares sold, you use the first in, ...

What is cost basis?

The cost basis of any investment is the original value of an asset adjusted for stock splits, dividends, and capital distributions. It is used to calculate the capital gain or loss on an investment after it's been sold, for tax purposes.

What does cost basis mean in investment?

Calculating the cost basis of an investment indicates the capital gain or loss on it— and thus, how much tax may be owed.

What to do if your cost basis is unclear?

If your true cost basis is unclear, please consult a financial advisor, accountant or tax lawyer.

What accounting method do you use when you can't identify the exact shares sold?

Several issues that come up when numerous investments in the same stock have been made over time and at different price points; if you can't identify the exact shares sold, you use the first in, first out (FIFO) accounting method.

When did brokerage companies not have to keep information?

But it may also be a problem to establish basis because brokerage companies were not required to keep this information until purchases made in 2011 or later (although some did keep the information before that – it’s hit or miss).

Can you give shares to charity?

Give the shares to Charity: You’ll get a tax deduction for the current value and won’t have to worry at all about the details you need for the basis calculation.

Do it yourself Investopedia?

Do-It-Yourself: A site called Investopedia has historical data that may be useful in establishing your basis changes since the purchase/inherited date by following their instructions on their site.

Why is cost basis important?

One reason calculating the cost basis correctly is important is it can affect your taxes. (Getty Images) Years and years ago, a beloved grandmother gave you a stock certificate for shares she'd cherished for decades, and now you're selling them for your child's fall semester. It happens all the time.

What to do if a benefactor hands you a stock certificate?

And if some benefactor hands you a dusty stock certificate, be sure to ask about purchase dates and costs, and then append that information if you give assets away.

What happens if you get the calculation wrong?

Get the calculation wrong and the IRS could accuse you of underpaying your tax. Or you might pay too much, which won't bother the IRS but won't do your finances any good, either.

What is the long term capital gains rate?

And the long-term capital gains rate is just 15 percent, which means most of the proceeds stay in your pocket even if you pay more tax than actually required. But calculating the cost basis of an ancient holding may not be as dreadful as you think.

Should dividends be added to the price originally paid for the shares?

If she paid tax on dividends that were invested in more shares, then the dividends should be added to the price originally paid for the shares. Raising that cost reduces the profit after a sale, cutting the capital gains tax after you unload the shares.

Can stock split over and over?

Over the years, the stock may have split over and over, dividends may have been reinvested, or the original company may have merged or been split apart. Each event can affect the cost basis. "For an investment that you purchase one time, it's easy to calculate – it's simply the price you pay for the investment the day you purchased it, ...

Do mutual funds keep cost basis?

Brokers and mutual fund companies are now required to keep records of cost basis, so securities acquired in the recent past are not a problem. But that won't help if your shares were originally on paper certificates, or were moved from one brokerage to another.

What is the basis of a stock?

If you bought the stock yourself, your basis is what you paid for the shares, including brokerage commissions (different rules apply if you inherited the stock or received it as a gift). If you have your old trade confirmations, it'll be easy to look up the amount of money you originally invested.

What is the basis of a stock when a benefactor dies?

Things are much easier if you inherited the stock. In that case, your basis is the stock’s value when your benefactor died.

How to remember when you bought shares?

If your broker doesn't keep records that far back, try to remember when you bought the shares and see what they were selling for then. A stock certificate might be dated or old tax returns might show when you began reporting dividend income. Then look up historical price quotes. If you can narrow down the purchase period to a few months, use the average price during that time as your basis and keep records of your methodology.

Does AT&T have a basis page?

Some companies, like AT& T, have a special Web page just for tax basis information, which includes a link to worksheets that can help you figure out your basis -- a tricky task if the company has had any spin-offs or mergers since you bought the stock.

Do you have to pay taxes on shares you sell?

But if you don't have that paperwork, then you'll have to take a few more steps to track down the cost. It's worthwhile to find out how much you paid -- otherwise, you'll get stuck paying taxes on the total value when you sell the shares rather than just on the earnings, leaving you with a much bigger tax bill than you actually owe.

Can you deduct stock basis?

If you still can't track down the basis, you could always give the stock away to charity rather than give cash. That way you'll never need to pay capital-gains taxes so you don't need to worry about finding out the basis, and you can deduct the current value of the stock when you give it as a charitable contribution, if you itemize.

What is cost basis?

Cost basis is the amount you paid to purchase an asset. When you invest in a stock, mutual fund or real estate, your cost basis is the price (or cost) of the asset on the day you bought it. Keeping track of your cost basis can help you determine your potential profit or loss should you decide to sell your asset.

How to find cost basis of mutual funds?

To calculate your basis, the average cost method takes the cost of all the shares you have purchased and divides it by the number of shares. Using the example above, if you purchased 10 shares of XYZ for $100 each and then 10 more shares for $120 each, your cost basis would be the total cost ($2,200) divided by the total number of shares (20 shares), or $110 per share.

How does dividend reinvestment work?

It might help to think about dividend reinvestment as if a company paid you cash directly, and you immediately took that cash and bought more shares of the same company. For example, say you invest in a mutual fund and have elected a dividend reinvestment plan, or DRP. The fund issues $1,000 in dividend payments to you. If those dividends are reinvested, buying you 10 additional shares, then your cost basis for each share would be $100.

What happens to taxable accounts when the owner passes away?

When the owner of a taxable account passes away, the beneficiaries of the assets can sometimes take advantage of a cost basis “step-up.” For example, if 20 years ago you bought 2,000 shares of XYZ for $2 per share, you’d have a cost basis of $4,000. Fast-forward to today and XYZ is trading for $200 per share, which means your 2,000 shares are now worth $400,000. If you decided to sell those shares, you’d realize a capital gain of $396,000 — which would result in a pretty hefty tax bill. If we assume a 15% capital gains tax rate, you would owe about ($396,000 x 15%) or $59,400 in capital gains taxes.

How much is the cost basis of XYZ?

So if you bought your 10 shares of XYZ from a broker for $100 per share, and you paid a 1% commission to place that trade, your cost basis would be $1,000 + (1% x $1,000), or $1,010.

What is the cost basis of a dividend?

If you reinvest a dividend that is paid out to you, the cost basis is the price you paid for the new shares.

Why use specific shares method?

This method can be beneficial if you're trying to limit the potential tax consequences of the sale. Using the example above, you could choose whether you wanted your cost basis to be $100 or $120 per share. This method allows for more flexibility, as you can choose which cost basis is more beneficial to you based on your tax situation.