I sold several shares of stock in a company that I purchased through a direct stock purchase program over a number of years. My stock brokerage account has been sold and purchased multiple times resulting in the fact that my current brokerage does not have the original transaction confirmations or the historical information from the previous brokerages.
I have already tried calling the brokerages and I am out of luck, they have nothing. I saved my original receipts but they are in long term storage and I cannot access them in time for the April 17 deadline, and filing an extension is not an option.
In this case, how do I determine the cost basis of the shares I sold in order to determine Capital Gain/Loss?
Are there IRS approved of methods that I could try?
Thank you very much.
You may find these tips useful:
If you know when the stock was purchased, here are some tips:
To be sure, for older stock, even this can be a challenge. Still, if you can come up with a date of purchase, or at least a real good estimate, you can use resources, and even the broker, to determine what the purchase price of the stock was to determine basis. (If you inherited the stock, you need the value of the stock on the date the person you inherited it from passed). A broker can give you the stock's history: when it may have split, etc., that can help to determine the true cost basis of the stock.
The effort is worth it, however, because if you don't come up with a basis, the IRS will determine your basis is zero. That would mean that the sales price of the stock would be your gain, and that your entire "gain" would be taxable.
This website had a few additional suggestions for how to determine the cost basis you might find interesting: How to Find Unknown Cost Basis of Bonds & Stocks | Finance - Zacks
If you do not have the original transaction confirmation, the next best thing is to make an educated guess on the cost basis of shares sold. The IRS will presume that your cost basis is zero. As a tax consequence, the sales proceeds of your shares would be reported as a capital gain. I would highly recommend to do a little research to figure out the cost basis of the shares sold. It could potentially save you a lot in taxes.
If your best educated guess is a date range rather than a specific date, use the historical prices at the start date and end date of that time-frame to come up with an average stock price for that time period. Make sure you keep a record of your calculation in case the IRS would like to know how you came up with your cost basis.