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Posted by Barry Margolin on April 11, 2007, 11:28 pm
Please log in for more thread options dingodog_1979@yahoo.com wrote:
> I am trying to calculate stock basis for stocks sold in
> 2006. These stocks were purchased in 2006 and earlier years.
> I do not have details on basis for stock purchased prior to
> 2006, so I can't really use FIFO to determine basis. Can I
> use "specific identification" then? For instance, I owned
> 100 stock A as of 1/1/06. If I purchased 30 A-stocks in June
> '06 for $100 and sold 30 A-stocks in Dec '06. Can I say that
> that the basis of the Dec '06 sale is $100 (=cost of the
> June '06 purchase) or I MUST use cost of stocks owned on
> 1/1/06? If I shoud use FIFO, what can I do if I don't have
> records to determine FIFO-basis properly? I was trying to
> read IRS publication on cost basis but it is not that
> detailed. Thanks for your replies!
If you want to use specific identification, you have to
select the shares at the time you submit the sell order.
You have to tell your broker which shares to sell, and get a
written confirmation from him of the share selection. You
CANNOT select the shares after the fact.
If you don't identify the shares at the time of the sale
then you MUST use FIFO, and have to do your best to
determine the cost basis of the oldest shares. If you know
the date you purchased the shares, but not the exact price
you paid, you can use a historical quotes web site to find
the price on that date.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
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