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Old 03-02-2009, 05:53 PM
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Unknown cost basis or purchase date

I have stock that I have sold and have to document a cost basis for, and these shares were purchased over a long period of time. I can't get records that go back that far (to the 1980's). Also I reinvest all my dividends so that adds to the cost basis.

How can I document this?

Thanks so much,

Scott



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Old 03-02-2009, 09:41 PM
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You are quite correct to note that all of dividends reinvested would be added to the cost basis. Now, regarding the original cost basis, I would suggest that you do some stock research and find out the original price of the security that you owned for which you have now sold your position.

You should perhaps visit your local library where you would find a database of the historical prices from the Wall Street Journal dating back to 1980's. You can use an estimate obtained by using the average price of the beginning of the year and the ending of the tax year (year of the stock purchase). The IRS will accept an original cost basis if it is obtained by some reasonable means, so please keep a proper documentation as to how you obtained the pricing.

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Old 03-03-2009, 12:03 PM
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I don't know the dates

Hi,

I know I can find the historical prices, I just don't know how to estimate the cost since I have no records and what documents to send to the IRS. Those stocks could have been bought any time between 1988 and 2006.

Scott



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Old 03-03-2009, 02:51 PM
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I think the IRS understands your particular situation, and for your information, whenever there are multiple stock purchases made at various times of the year and over several years that date over 10 years I think you can use a best estimate method and document how you arrived at this amount in your file.

I would take the average price that ranges from 1988 to 2006 based on your stock shares purchased. An average cost price will suffice in this case. An attempt at your best estimate will be accepted by the IRS!

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