How do I calc CG on sale of 132 shares stock? Orig 100 sh, 12/31/98 closd 90.75(9,075); 4/17/07 $68.76($9,076)

Question

Original 100 shares recorded 1.1.99; current 132 shares. The value dif=$1. Is this $1 CG for which I pay tax on income? This is only stock I've ever owed--novice here at age 64.

Answer 1

are we to assume you purchased 100 shares of a company and you held that stock until they were acquired or bought out by another company and when they did the conversion from one stock to the new company stock the calculation resulted in you owing 32 additional shares or a total of 132 shares
because if this had been reinvested dividends then your overall total cost basis would be larger and DIFFERENT from your original total cost basis (and hence would not be the same)
if that is the case which i believe it is your total cost basis in the 132 shares would be the same as the cost basis for the 100 shares (of the previous companies stock)
i believe the $1.00 is a rounding off your cost basis due to it originally being divided by 100 and now being divided by 132. the total cost basis must have been 9075.xx (something cents) for this to have happened in this manner.
if this was a sale then my only concern really is your calculation of the capital gain.
i believe either the proceeds received or your total cost basis is incorrect.
the proceeds received in a sale of stock is reported to the irs annually on the 1099b. the proceeds received are usually but not always)calculated as follows
selling price(subtract) brokerage fees (commission)= proceeds received.

total cost basis is calculated as follows.
cost of securities purchased (plus) brokerage fee =total cost basis (cost basis per share would be total cost basis divided by the number of shares held)

the calculation for capital gains would be proceeds received (subtract)total cost basis= if positive a capital gain and if negative a capital loss.
the irs requires a taxpayer to discern the capital gains and losses separately in two categories long term and short term.
long term is defined as being held more than one year (minimum 1 year and 1 day
short term is defined as being held less than one year (1 day to 364 days)
a taxpayer would be required to breakdown their purchases in to these twp categories (and the costs for each) when calculating and reporting any capital gain.

Answer 2

I assume you're saying that you originally bought 100 shares, and that had become 132 shares by the time you sold, through something like reinvested dividends.

You need to know what you paid for the shares in the first place, plus the amount of any reinvested dividends. I know that's asking a lot to have all those records. If you don't have the info, you can come close enough to a number to use.

Your basis is probably something pretty close to $9075 if you bought 100 shares the day after that was the closing price, but you could add in the amount of any reinvested dividends, so you'd show a (probably small) capital loss on your return. If you have other income besides this, you can take up a loss against the other income.

When did you sell the shares? Unless you just sold them today, the price today doesn't have anything to do with your return, it's what you got from selling them.

Email me if I've confused you totally, with the date you sold them, the name of the shares, and the amount of the check you got if you know it, and I'll try to do the numbers for you.

Answer 3

If you are selling all of the shares, then, yes, you have $1 in capital gains to pay. The end effect (as long as you are selling everything) isn't really affected by splits and/or dividends.

I hope you got some juicy dividends on those shares that you didn't reinvest, as that wasn't a very good investment!!

Not that you asked for it, but In my opinion, you shouldn't be investing in stocks at your age (at least not much). Stick to less risky investments.

Answer 4

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Answer 5

Sounds like you did not sell it yet. You do not pay capital gains tax on "unrealized gains". You only report the gain or loss in the year you sell the stock.

Period.

Answer 6

use the weighted average. but you would need to put in the date considering the date purchased is not short term.

Answer 7

Add them up.