Contact UsHow do I figure the cost basis of shares of stock that were purchased at different times?
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William Keats
There are various methods in determining cost basis when selling stock. The most used is FIFO.
This is the method used if the shares sold cannot be identified.
The next method is Average basis. Used only if the taxpayer acquired the shares at various times and prices. Divide the total cost of shares owned, by number of shares owned, using various methods.
The 3rd cost basis method is Specific share identification. The adjusted basis of specific shares can be used to figure gain or loss if those shares are accurately identified.
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569 weeks ago
This is the method used if the shares sold cannot be identified.
The next method is Average basis. Used only if the taxpayer acquired the shares at various times and prices. Divide the total cost of shares owned, by number of shares owned, using various methods.
The 3rd cost basis method is Specific share identification. The adjusted basis of specific shares can be used to figure gain or loss if those shares are accurately identified.
George Prytula
I have run into that situation many times and had various amounts of supporting documentation available. I recently advised a relative to just use a ZERO BASIS for the sale transaction. I know, not a very popular approach, but a quick solution, and one that the IRS can not argue with. Her personal time was just not worth the research that would have been needed to get an exact figure for the tax basis. GPIII CPA. Only you know what your time is worth.
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568 weeks ago
George Prytula
Oh, I forgot to mention, some of the stock shares had passed through one or more Decedents' Estates, another head ache that she did not want to deal with, or pay someone else to handle.
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568 weeks ago