15

There are two scenarios to determine the relevant date, and then a couple of options to determine the relevant price. Relevant Date If the stocks were purchased in your name from the start - then the relevant date is the date of the purchase. If the stocks were willed to you (i.e.: you inherited them), then the relevant date is the date at which the person ...


14

Trace the transaction. At the start you had no computer and no cash; and in the end you had no computer and $400. Therefore the gain is $400... Unless you gave them a price break on the service - in other words a barter. Then it would depend on the value of the credit you gave them. But the credit was part of your income for the original transaction.


11

Having all of the numbers you posted is a start. It's what you need to perform the calculation. The final word, however, comes from the company itself, who are required to issue a determination on how the spin-off is valued. Say a company is split into two. Instead of some number of shares of each new company, imagine for this example it's one for one. i.e....


11

Even if the math works out there are risks: The IRS could do an audit and determine it was designed to avoid tax. They would be concerned that the conditions put on the gift don't make it a gift. As JoeTaxpayer noted in the comments - This is known as the "Step Doctrine" which refers to a series of individual events or transactions, each of which is fine, ...


11

Unless you made after tax contributions your basis is zero and all distributions are taxable income. If the cost basis is unknown it would be treated as if it were zero. Relatively few 401(k) plans allow after tax contributions and its likely that you would know if you had made them. I’m referring to after tax contributions to a traditional 401(k) plan ...


8

Reinvested dividends go into cost basis but don't involve any additional investment.


8

You should receive tax forms such as 1099-OID (for interest) and 1099-B (for charge-offs). Apparently, in contrast to traditional bonds with "coupon" interest payments reported on 1099-INT and principal returned at maturity, many peer-to-peer loans are structured as debt that you purchase at a discount. In your example, you bought $1200 of debt for $1000. ...


8

The term "stepped up basis" is kind of a misnomer because as you point out, basis can go both up and down, meaning essentially basis is just "reset". This means you're better off selling losing stocks before death so you can take advantage of the tax loss. At death the losing and winning stocks are all reset to their present value.


7

Generally it is advisable to mention what country you're asking about, as tax laws differ. To the best of my knowledge, however, this particular issue is handled consistently in every tax jurisdiction I'm familiar with. You invested X, it appreciated and is now worth X + Y. In your example, X = $10,000 and Y = $40,000. Total X + Y = $50,000. When you ...


7

You bought 10 shares for $10 each, cost basis of $100. Your shares have done well and today the shares are worth $50 each, your position is worth $500. The company does a two for one split (2:1). You now have 20 shares valued at $25 each, your position is still worth $500 and your cost basis remains $100. If you sell your whole lot it doesn't make a ...


7

All 200 shares are worth whatever you can find somebody willing to buy them for. If you're talking about a highly liquid stock with plenty of buyers and sellers, that's usually somewhere close to the last traded price that you will see widely reported on financial websites. If you just purchased 100 shares at $150, immediately afterwards you would likely be ...


6

Earnings on investments within your Roth IRA that are reinvested within your Roth IRA do not increase your basis in your Roth IRA. Your basis in your Roth IRA is the total amount of post-tax money that you have contributed to your Roth IRA. There are three categories here. The amount that you have contributed directly to your Roth IRA over the ...


6

If it's fully expensed, it has zero basis. Any sale is taxable, 100%. To the ordinary income / cap gain issue raised in comment - It's a cap gain, but I believe, as with real estate, special rates apply. This is where I am out of my area of expertise, and as they say - "Consult a professional."


6

Cost basis doesn't matter because all distributions are: taxable in traditional retirement accounts. non-taxable in roth accounts. Contributions are relevant to roth accounts because you can take those back within certain parameters without any penalty.


5

You only got 75 shares, so your basis is the fair market value of the stock as of the vesting date times the number of shares you got: $20*75. Functionally, it's the same thing as if your employer did this: Paid you $2,000 cash Withheld $500 of that cash for taxes, and recorded that withholding on your W-2 Immediately forced you to buy company stock with ...


5

Profit = Sale price - Basis Basis = Purchase price - any depreciation taken, including expensing it.


5

For every document that the IRS posts, there will be a correlating instructions page. This would be the instructions for the 1099-B, here. Furthermore, as you will be reporting this on Form 8949, as a substitute for previously used Schedule D; instructions are here.This article explains that the best course of action is to donate the shares as the cost basis ...


4

You sign under penalty of perjury that your tax return is correct. That said, if the misstatement is in government's favour, and in such relatively insignificant amounts (relatively, since there's no materiality threshold for tax issues), I would guess that no-one will go after you, even if discovered. If audited, let the auditor do the calculations, and ...


4

Reporting costs on a fully-loaded basis means that the business should report costs directly and indirectly associated with its product and the relevant indirect costs, e.g. overhead, indirect charges, etc. If you're looking at a company in general, the fully-loaded cost basis of the firm is essentially all costs related to the product(s) it offers. In ...


4

You can see the shares are to 3 digits beyond decimal, but the dollars go out 4, or 1/100 cent. Shares accurate to 1/1000 means it's priced to 1 cent per 100,000 whole shares. You ask why the price is off. I suspect a rounding artefact created by the effect of the shares and dollars invested being divided back to an exact share price.


4

I was doing my taxes in the US (called Form 1040) and wanted to find out how to figure out the cost basis for the $3.006 that I received for each Siemens ADR that I hold in July 2013. I found that the cost-basis allocation ratio is as follows: Siemens AG: 96.48% Osram Licht AG: 3.52% Thus for the original poster the cost-basis is: Siemens = 800,000 * 96....


4

From IRS Pub 559 Survivors, Executors, and Administrators Basis of Inherited Property: The FMV of the property on the date of the individual's death. The FMV on the alternate valuation date (discussed in the Instructions for Form 706) if elected by the personal representative. So the valuation of the property must be the Fair Market Value. I don'...


4

Based on the key parts of the question: A. Martha doesn't have a retirement plan at work. B. Martha makes too much to deduct the traditional IRA contribution C. Martha makes too much money to participate in a Roth IRA. From these three statements we know: From A we know Martha has no 401(k) or 401(k) like retirement plan at work, she also doesn't have a ...


3

Your inference in #1 is incorrect. The million dollars he has contributed is going to be part of the assets of the fund. This is common practice and is a way for the founder to express confidence that the fund will make money. He wants you to come up with a model that he can then use to trade those assets. Presumably he will give you some money if he ...


3

I will need to report 6 cost bases to the IRS, and I think they need to add up to $0.17 Not at all. If you're rounding, the IRS requires data rounded to the closest full dollar. In this case, the cost basis will be $0 for all items. What is a good algorithm/method to pick each cost basis in situations like this? You don't need any algorithms. All ...


3

I have a little experience with this. My home state of Wisconsin was on this list until 2011. The thing to remember is that these states simply do not recognize the HSA. What this means is that there are no state income tax advantages to the account, and no state tax penalties, either. Here are the implications: Contributions. Contributions that you ...


3

You are on the right track. As this seems more an accounting question than an actual tax question, I'll point out several points of discussion. Assume there is a property owned by a couple with one son. When one parent dies, s/he bequeaths one half interest in the property to the son and half to the spouse And Both parents owned the property as ...


3

This answer fills in some of the details you are unsure about, since I'm further along than you. I bought the ESPP shares in 2012. I didn't sell immediately, but in 2015, so I qualify for the long-term capital gains rate. Here's how it was reported: 2015 W2 from BigCorp The 15% discount was reported on a W2 as BOX 1. WAGES TIPS AND OTHER INCOME: $882 ...


3

There are a number of options to consider: If you can at least narrow down to the year, you can choose the "worst case" which is to use the lowest value during that year. In an audit, you'd still need to explain how you chose the year. Claim zero. Over 20 years, the S&P is up 6 fold. If the shares are worth $20,000, and your cost was say, $4000, a ...


3

Once again I offer some sage advice - "Don't let the tax tail wag the investing dog." Michael offers an excellent method to decide what to do. Note, he doesn't base the decision on the tax implication. If you are truly indifferent to holding the stock, taxwise, you might consider selling just the profitable shares if that's enough cash. Then sell shares at ...


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