Stock basis problem

[trax]

What is the name of your state? Texas.

If I have some stocks that were given to me by my father. There is no way to know when they were originally purchased or what the basis is for them. Does anyone know what I am legally obligated to do in order to estimate a fair basis for them. Should I use fair market value at the time that I acquired the stocks?

 

[ShyCat]

No, since the stock was gifted to you by your father, you inherit your father's cost basis in the stock. Without knowing when the stock was purchased by your father, the only cost basis you can support in an IRS audit is zero.

 

[trax]

Thank you Shycat

Thank you Shy Cat. Your answer regarding a zero default stock basis made sense and was helpful. I appreciate it.