Nightmare in finding the cost basis of stocks in an old testamentary trust account

What is the name of your state? California

Are there any valid shortcuts in determining the cost basis of stocks in an old inherited account? Many statements are missing and some stocks split numerous times, their progeny splitting numerous times too, going through divestitures, mergers and acquisitions and bankruptcies. Many of the original stocks are no longer in the account and it will take much more work to find out how some of the final stocks got there. Are the actual cost bases mandatory? How likely is an IRS audit and how would they compute the cost bases? I'm sure they wouldn't go through the many many details that I've been going through.

Thank you very much in advance for your anticipated help!

George23 said:

What is the name of your state? California

Are there any valid shortcuts in determining the cost basis of stocks in an old inherited account? Many statements are missing and some stocks split numerous times, their progeny splitting numerous times too, going through divestitures, mergers and acquisitions and bankruptcies. Many of the original stocks are no longer in the account and it will take much more work to find out how some of the final stocks got there. Are the actual cost bases mandatory? How likely is an IRS audit and how would they compute the cost bases? I'm sure they wouldn't go through the many many details that I've been going through.

Thank you very much in advance for your anticipated help!

Click to expand...

Ginny gave you a good link, but sometimes when you have a situation that complicated, if you can simply find out how much actual cash was invested in the account, then you can group them all together and use the invested cash as the basis...or proportionally split the cash among the specific stocks being sold today. If trading occurred within the account, then you have to go back to old tax returns and separate out already reported gains and losses. You would add gains to basis and deduct losses from basis. This avoids paying tax on gains you have already paid tax on, and deducting losses that you have previously deducted.

Make yourself a good spreadsheet of your calculations, and keep it with the tax return.