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"Incomplete" Cost Basis
Posted on 3/19/24 at 3:52 pm
Posted on 3/19/24 at 3:52 pm
One of my regular stock positions in my Schwab (formerly TDA) account says the cost basis is incomplete. I click on the incomplete URL and it shows a lot from 9/1/23 with missing cost basis. That was the date that my holdings in Company A converted to shares of Company B when Company B's acquisition of Company A closed and the stock transaction completed.
I've been holding that position since 2020 and because the cost basis is incomplete, it's showing a short-term holding time.
I'm planning to finally sell some shares, but obviously don't want to take a short term capital gains tax hit.
I'm in line for Schwab cost basis team to call me back.
Has anyone ever come across this?
I've been holding that position since 2020 and because the cost basis is incomplete, it's showing a short-term holding time.
I'm planning to finally sell some shares, but obviously don't want to take a short term capital gains tax hit.
I'm in line for Schwab cost basis team to call me back.
Has anyone ever come across this?
3
Posted on 3/19/24 at 5:31 pm to ColoradoAg03
It happened to me with TD Ameritrade. I sent them a message (through my app / account services) and told them my cost basis which I had known by looking up a previous statement from my brokerage prior to TDA. They had it fixed within a day. Never even asked for corroboration on the cost basis. I could have made it up (given a higher cost basis) to limit my taxable liability.
This post was edited on 3/19/24 at 5:32 pm
Posted on 3/20/24 at 10:31 am to ColoradoAg03
The IRS only requires brokers to provide cost basis info on shares that were purchased in that account.
Company B shares were not purchased in that account.
If it was a simple tax-free merger (which is common), then the cost basis in the shares of A company carry over to Company B shares. So you just need to contact the broker and tell them that. If they have the cost basis from A originally, they should be able to look it up. If not, you might have to provide it to them.
If you got some cash out of the merger, then you may need to reduce the basis by the amount of cash you received.
Usually, you can google "tax issues with merger of..." and get a good idea of how this needs to be handled.
No big deal.
Edit: I want to know who downvoted this... LOL
Company B shares were not purchased in that account.
If it was a simple tax-free merger (which is common), then the cost basis in the shares of A company carry over to Company B shares. So you just need to contact the broker and tell them that. If they have the cost basis from A originally, they should be able to look it up. If not, you might have to provide it to them.
If you got some cash out of the merger, then you may need to reduce the basis by the amount of cash you received.
Usually, you can google "tax issues with merger of..." and get a good idea of how this needs to be handled.
No big deal.
Edit: I want to know who downvoted this... LOL
This post was edited on 3/20/24 at 2:23 pm
Posted on 3/21/24 at 12:02 pm to ColoradoAg03
I have an extra $400 since the transfer.
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