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Posted by Susan Grossman on February 13, 2007, 1:30 am
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How do I figure out the COST BASIS of Verigy stock?
I'm pulling my hair out in frustration.
Long ago I bought HWP (Hewlett Packard) and long ago sold it
(as HPQ). Meanwhile, HWP dividended off A (Agilent) which in
itself dividended off VRGY (Verigy).
In 2006 I finally sold both the A and VRGY shares,
completing the sale.
My problem is that I have no idea what my COST BASIS is for
the A and VRGY shares are (I sold the HPQ at a loss a few
years ago).
Can you tell me HOW I am supposed to get my cost basis for
tax purposes on the A and VRGY shares?
Sue
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Posted by Susan Grossman on February 13, 2007, 5:02 pm
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I wish this wasn't so difficult to figure taxes out on a
hundred shares of stock! Here is what I have figured out so
far.
TAX EVENT 1:
In 1998, I paid $5,475.40 for 100 shares of Hewlett Packard
(HWP).
TAX EVENT 2:
On June 2, 2000 I received .3814 shares of Agilent (A) for
each share of HWP, resulting in 38 shares of Agilent with
the .14 share fraction being paid to me in cash.
Agilent was $81.75 on 6/2/2000 so .14 shares x $81.75 =
$11.45 cash.
I calculated a cost basis for Agilent in 2001 of:
Cost basis of A = (Cost of HWP - Value of .14 share of A) * 22%
Cost basis of A = ($5,442.45 - $11.45) * 22%
Cost basis of A = $5,431.oo * 22%
Cost basis of A = $1,194.82
TAX EVENT 3:
100 shares of HWP turned into 200 shares of HPQ, and
HWP ceased to exist. Not only was this a 2:1 split, but the
symbol changed from HPW to HPQ. I don't think this incurred
any taxes though.
TAX EVENT 4:
I sold the 200 shares of HPQ for $5,307.87 in 2001.
The cost basis I used for HPQ on my 2001 taxes was:
Cost basis of HPQ = (Cost of HWP - Value of .14 share of A) * 78%
Cost basis of HPQ = ($5,442.45 - $11.45) * 78%
Cost basis of HPQ = $5,431.oo * 78%
Cost basis of HPQ = $4,236.18
My 2001 tax records show the gain I paid taxes on was:
Long-term Gain = Sale basis for HPQ - Cost basis for HPQ
Long-term Gain = $5,307.87 - $4,236.18
Long-term Gain = $1,071.69
TAX EVENT 5:
On November 1, 2006, each share of Agilent spun off 0.122435
shares of Verigy (VRGY) resulting in 4 shares of Verigy
(VRGY) for my 38 shares of Agilent with the fraction being
paid to me in cash. I guess I first have to figure out how
much that fraction was.
TAX EVENT 6:
I finally decided to put an end to my tax calculation misery
on this stock, so, in December of 2006, I sold the 38 shares
of Agilent for a total of $1,222.39. I guess I can't figure
out the loss incurred until I figure out what the lousy
fractional share was worth and what the new cost basis of
Agilent was given it spun off Verigy.
TAX EVENT 7:
At the same time, since the Verigy calculations caused more
misery than the stock was worth, I also sold the 4 shares of
Verigy for a total of $56.48.
Does all of this make any sense to you experts? Am I going
in the right track at least? I wish they didn't make this so
miserable for nothing.
Sue
REFERENCES:
Agilent to Verigy spinoff calculations:
http://www.schwabpt.com/resources/actions/library
/A_VRGY_01Nov06.pdf
http://media.corporate-ir.net/media_files/irol/10/103274
/VRGY/VRGY_InformationStatement.pdf
Hewlett Packard to Agilent spinoff calculations:
http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-faqAgilent
Hewlett Packard HWP to Hewlett Packard HPQ stock split
calculations:
http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-stockSplit
So far, I read everything above and here's what I've
calculated so far which may help other Hewlett Packard share
holders.
Moderator:
www.tiny.url converts long URLs into URLs that are
significantly easier to use!
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Posted by Ernie Klein on February 13, 2007, 11:07 pm
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[lots of good work deleted for brevity]
> Does all of this make any sense to you experts? Am I going
> in the right track at least?
Not an expert, and I didn't check your math or references,
but it all looks good to me. I see that you did indeed, do
the math and reduce the cost basis in the original HPQ stock
before you sold it in 2001 so that is not a problem. All
that is left to do now is figure the basis for the other
stocks the same way. You are on the right track.
> I wish they didn't make this so miserable for nothing.
Just be thankful that you didn't buy AT&T stock in 1962 like
I did :)
I have lost track of the number of companies and stocks that
have spun off, merged, re-spun off, and reemerged and
finally becoming the NEW AT&T not to be confused with the
OLD AT&T. I defy anyone to figure the cost basis of the
stock in the new AT&T, keeping in mind that all dividends
from all the spinoffs were reinvested for years.
--
-Ernie-
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by joetaxpayer on February 13, 2007, 5:03 pm
Please log in for more thread options Susan Grossman wrote:
> How do I figure out the COST BASIS of Verigy stock?
> I'm pulling my hair out in frustration.
>
> Long ago I bought HWP (Hewlett Packard) and long ago sold it
> (as HPQ). Meanwhile, HWP dividended off A (Agilent) which in
> itself dividended off VRGY (Verigy).
>
> In 2006 I finally sold both the A and VRGY shares,
> completing the sale.
>
> My problem is that I have no idea what my COST BASIS is for
> the A and VRGY shares are (I sold the HPQ at a loss a few
> years ago).
>
> Can you tell me HOW I am supposed to get my cost basis for
> tax purposes on the A and VRGY shares?
For Agilent, the basis is 22% of your HP basis, see
http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-faqAgilent
(you then adjust when you figure basis for VRGY)
For VRGY the basis is .0578 of the Agilent shares basis, see
www.schwabpt.com/resources/actions/download.asp?id=A_VRGY
(this link will offer to download a PDF, if this alarms you,
go to
http://www.schwabpt.com/resources
and enter vrgy to see the link)
Google is your friend.
JOE
JoeTaxpayer.com
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by William Brenner on February 13, 2007, 5:22 pm
Please log in for more thread options Susan Grossman wrote:
> How do I figure out the COST BASIS of Verigy stock?
> I'm pulling my hair out in frustration.
>
> Long ago I bought HWP (Hewlett Packard) and long ago sold it
> (as HPQ). Meanwhile, HWP dividended off A (Agilent) which in
> itself dividended off VRGY (Verigy).
>
> In 2006 I finally sold both the A and VRGY shares,
> completing the sale.
>
> My problem is that I have no idea what my COST BASIS is for
> the A and VRGY shares are (I sold the HPQ at a loss a few
> years ago).
>
> Can you tell me HOW I am supposed to get my cost basis for
> tax purposes on the A and VRGY shares?
Assuming that the first quoted price for each spun off stock
is your basis, here is how to find them:
Go to Yahoo Finance http://finance.yahoo.com/ Enter the
stocks' symbols > For each stock, click on Historical Prices
in the left column > Adjust the End Date to the day
following the Start Date > Click Get Prices and scroll down.
Using this method, I got $14.38 for Verigy on 6/14/06 and
$38.05 for Aligent on 11/19/99.
Please note that I do not guarantee that this method is the
correct one. Perhaps the pros will comment. (I am certain
that they will should I be wrong.)
And PLEASE, PLEASE STOP PULLING YOUR HAIR OUT.
Bill
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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