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Income Tax Question

Discussion in 'BBS Hangout' started by jdh008, Apr 3, 2016.

  1. jdh008

    jdh008 Member

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    I'm hoping some accounting-minded or otherwise tax-savvy CFs out there can help me out here.

    Years ago, I was gifted stock by grandfather. In 2015, I sold that stock at a profit over what my grandfather initially paid per share.

    Now that it's tax time, I need to figure out my cost basis. These were non-covered shares, and as such, cost basis was not listed on my 1099-B. The issue is that I'm not sure of the whereabouts of any documentation showing the price of the shares when he purchased them.

    With that in mind, what are my potential options for finding/figuring cost basis?

    Thanks in advance for the help!
     
  2. Supermac34

    Supermac34 President, Von Wafer Fan Club

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    EDIT: Real answer

    If you received the gift as an inheritance you get "step up" basis. You pay the tax on the capital gains on the basis of the value on the day you inherited the shares to the day you sold them.

    If they were a true gift, you do not get step up basis, you take the basis he had when he purchased them. You'll be forced to try to research on the prices he paid, or at least the average. If those records are completely unavailable you are kind of stuck paying total tax: http://finance.zacks.com/unknown-cost-basis-bonds-stocks-11099.html
     
    #2 Supermac34, Apr 3, 2016
    Last edited: Apr 3, 2016
  3. jdh008

    jdh008 Member

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    That number would be much easier to figure, as I have the date on which the shares were gifted to me. But based on what I've read, the cost basis figure on shares that were gifted and then sold is the cost to the original buyer at the time they were purchased.

    Certainly, I'd love to be corrected if I'm wrong on that.
     
  4. bobrek

    bobrek Person, woman, man, camera, TV
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  5. Supermac34

    Supermac34 President, Von Wafer Fan Club

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    Sorry, consulted with a real CPA (my wife) changed answer (above).
     
  6. Dubious

    Dubious Contributing Member

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    I've had some issues like this in the past where the actual cost basis couldn't be identified exactly. The real truth is, relax, the IRS doesn't really care. You put down a reasonable number and they almost never question it, they can't verify anything more than you can and they don't care to spend time on anything that costs them more than they collect.

    Put in a little effort, make you your best estimate, pay what you think you owe and you're fine. They are so underfunded, undermanned and overworked with real big money issues and fraud they won't even notice.
     
  7. JuanValdez

    JuanValdez Contributing Member

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    The law offices of Mossack Fonseca can make sure you don't have to pay any tax on that.
     
    1 person likes this.
  8. ima_drummer2k

    ima_drummer2k Contributing Member

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    Bump....

    I mailed my taxes in around the 1st week of April and according to that "where's my refund" IRS website, they are unable to provide any information about my return.

    Should I be concerned that my taxes were lost in the mail? Or keep waiting? How accurate is that website? Have they really not received my return or is the website just not updated?
     
  9. geeimsobored

    geeimsobored Contributing Member

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    Edit - Didn't see this was old. Anyway, did you mail or e-file?
     
    #9 geeimsobored, May 18, 2016
    Last edited: May 18, 2016
  10. juicystream

    juicystream Contributing Member

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    Why didn't you e-file? Where's my refund is an up to date website. I'd call the IRS if you want confirmation of it being received.
     
  11. fallenphoenix

    fallenphoenix Contributing Member

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    I don't know the specifics, but if it is actually a gift (not inheritance)... it is not taxable up to $100,000.
     
  12. juicystream

    juicystream Contributing Member

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    Please don't give tax advice.
     
  13. HR Dept

    HR Dept Contributing Member

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    :grin::grin::grin:
     
  14. peleincubus

    peleincubus Member

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    Super legit.
     
  15. tim562

    tim562 Contributing Member

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    I mailed my grandmas taxes in because she was deceased. It took 3 weeks for an update on the "Wheres My Refund" site. Then, the status bars disappeared after a week. Turns out, the IRS needed more information, which we provided after they mailed information to us. Then the status bars reappeared and my grandmas refund was deposited for my mom.
     

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