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Subject Author Date
Schedule D and Cost-Basis help John 02-25-2007
Posted by ed on February 27, 2007, 3:16 pm
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>> Schedule D has got me baffled!
>>
>> Here's the story:
>>
>> On 10/22/04, I bought 12 shares of Pixar at 79.86 a share
>> (958.32) + 9.95 commission + $1 confirm fee= $969.27
>>
>> On 4/20/05, the 12 shares were sent to me in certificate
>> form ($30 fee)
>>
>> On 4/22/05 (2 days later while the orignial 12 shares were
>> in the mail), Pixar had a 2 for 1 stock split, giving me
>> another 12 shares.
>>
>> On 6/6/05, the 12 new shares were issued to me in
>> certificate form (another $30 fee)
>>
>> On 6/1/2006 , the 24 shares of Pixar were converted (1 to
>> 2.3) to 55.2 shares of Disney stock at 29.09. The 55 shares
>> went on into the plan..
>>
>> I received a check for the fractional share (.2) x a share
>> price of $28.0329 = a $5.61 check.
>>
>> Now on Schedule D:
>>
>> On Part II (Assets held more than a year),line 8?? (I had the Pixar stock
>> for over one year, but the Disney stock was less than a year. Which section
>> of D do I use??
>>
>> A: Description: . 2SH Disney (or Pixar)
>> B: Date acquired: ?? When I acquired Pixar or Disney?
>> C: Date sold: 6/1/06 ?
>> D. Sales price: 29.09 ?
>> E: Cost or other basis:??
>> F: Gain or loss: ??

> A. .2 sh Dis
> B. 10/22/04
> C. 6/1/06
> D. $ 5.61
> E. $ 3,73
> F. $ 1.88

My original post got cut of its text leaving only the
numbers in my post above..

Your cost is (958.32) + 9.95 commission + $1 confirm fee=
$969.27 + $30 + $30 = $1,029.27 and it eventually got you
55.2 shares of Disney. that's $18,646 per share making your
.2 shares have a cost basis of $3.73. Since you got $5,53
for them your profit is $1,88. It is long term becasue you
originaly bought the shares over a year ago. Eveything
else is ignorable.

ed

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Posted by Barry Margolin on February 27, 2007, 4:14 pm
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> Schedule D has got me baffled!
>
> Here's the story:
>
> On 10/22/04, I bought 12 shares of Pixar at 79.86 a share
> (958.32) + 9.95 commission + $1 confirm fee= $969.27
>
> On 4/20/05, the 12 shares were sent to me in certificate
> form ($30 fee)
>
> On 4/22/05 (2 days later while the orignial 12 shares were
> in the mail), Pixar had a 2 for 1 stock split, giving me
> another 12 shares.
>
> On 6/6/05, the 12 new shares were issued to me in
> certificate form (another $30 fee)
>
> On 6/1/2006 , the 24 shares of Pixar were converted (1 to
> 2.3) to 55.2 shares of Disney stock at 29.09. The 55 shares
> went on into the plan..
>
> I received a check for the fractional share (.2) x a share
> price of $28.0329 = a $5.61 check.
>
> Now on Schedule D:
>
> On Part II (Assets held more than a year),line 8?? (I had the Pixar stock
> for over one year, but the Disney stock was less than a year. Which section
> of D do I use??
>
> A: Description: . 2SH Disney (or Pixar)

It's either .2 shares Disney or .087 shares Pixar. Did they
issue a 1099-B? If so, I'd use the company specified on the
1099-B, otherwise I don't think it will matter.

> B: Date acquired: ?? When I acquired Pixar or Disney?

If this was a tax-free conversion, your acquisition date of
the Disney stock is considered to be the original
acquisition date of the Pixar stock, i.e. 10/22/04. So it's
a long-term gain.

> C: Date sold: 6/1/06 ?

Correct.

> D. Sales price: 29.09 ?

There's no Sales price on Schedule D, there's the Gross
Proceeds, which is $5.61.

> E: Cost or other basis:??

Your original cost basis was $969.27 for 24 shares (the fees
for getting certificates isn't part of the cost basis), or
$40.39/share. The cash is due to .087 shares, so the cost
basis was $3.51.

> F: Gain or loss: ??

$2.20 gain.

--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

<< ======================================================= >>
<< 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. >>
<< ======================================================= >>

Posted by Bill Brown on February 27, 2007, 4:14 pm
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> <<SNIP>>
> Now on Schedule D:
>
> On Part II (Assets held more than a year),line 8?? (I
> had the Pixar stock for over one year, but the Disney
> stock was less than a year. Which section of D do I use??

Your gain is long term.

> A: Description: . 2SH Disney (or Pixar)
> B: Date acquired: ?? When I acquired Pixar or Disney?

10/22/2004

> C: Date sold: 6/1/06 ?
> D. Sales price: 29.09 ?

Sales price for .2 shares, according to your data, is $5.61

> E: Cost or other basis:??

I compute a basis per share for the Disney stock of $18.646.
That makes the basis of .2 shares be $3.73.

> F: Gain or loss: ??

$5.61 - 3.73 = $1.88 Long term capital gain

<< ======================================================= >>
<< 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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