Since the title stocks are or were very widely owned, I am hoping someone can shed light on a sticky situation.
Husband sold some shares of Alcatel-Lucent (ALU) in December 2011. He acquired the ALU as a result of the merger with Lucent Technologies (LU) in 2006. I need to figure out the cost basis, since the loss is significant. He invested several thousand $$ in LU before it crashed in the early 2000's.
We cannot find any records that he ever owned AT&T, which spun off LU in 1996. He does own AT&T stock now, because he had owned Bell South stock since the mid-1980's [before our marriage], and AT&T took over Bell South in 2007. But Bell South didn't spin off LU.
Yet he must have owned AT&T in 1996 - how else would he get the LU? I was keeping checkbook in the 90's, and I don't see any $$ going to purchase LU until 1999.
He didn't keep records from the 80's. I can do nothing about that.
Anybody got a clue about the cost basis calculations?
Thanks, from a frustrated...
Amethyst
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
Thanks, already checked the on-line cost basis sheets. Can't plug-in info that I do not have! Yes it's too bad we don't have the info, but we can't be the only people in the world in this situation....
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
........................ He invested several thousand $$ in LU before it crashed in the early 2000's.
perhaps you didn't mean what you wrote or I am misunderstanding.....
but if he bought Lucent before it merged w/ Alcatel, isn't that the reason
(basis) he had the Alcatel-Lucent stock?
Kaneohe - it is very confusing. He received 18 LU shares in 1996 when LU spun-off from AT&T. THOSE are the shares whose cost basis I am trying to figure out, but I can't find any info on the AT&T he MUST have owned in 1996.
He invested a lot of $$ in LU (this is documented) back when LU was booming. During the 2000's, LU spun-off AGERE (which became LSI) and AVAYA, which reduced the cost basis of the LU shares. We have that data. In 2006, LU merged with Alcatel-Lucent. His LU shares were converted to ALU, which he sold last year, obviously at a big loss compared with all the $$ invested in LU. We want to claim that loss on our 2011 return. But we don't know how much loss we can claim, because our cost basis data is incomplete.
Amethyst
Quote:
Originally Posted by kaneohe
perhaps you didn't mean what you wrote or I am misunderstanding.....
but if he bought Lucent before it merged w/ Alcatel, isn't that the reason
(basis) he had the Alcatel-Lucent stock?
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
I did this a while ago 2003 when I thought it could only get more complicated. I still have some of the split info on Agere A, B, and Avaya in Quicken. I just burned my 2003 income tax, stock cost basis file on Saturday.
Well, we have tax records back to 1998, but that doesn't help with what happened to his investments between 1984 and 1998. If only the IRS had some sort of statute of limitations.
Amethyst
Quote:
Originally Posted by grasshopper
I did this a while ago 2003 when I thought it could only get more complicated. I still have some of the split info on Agere A, B, and Avaya in Quicken. I just burned my 2003 income tax, stock cost basis file on Saturday.
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Amethyst - my father had similarly old ATT holdings, which as you know gave birth to Lucent. He sold the Lucent shares in 2011. When he told me the effort he had done to calculate the costs basis, he seemed proud to have figured out the puzzle. His calculations put the cost basis for each such Lucent share at $44.81. Hope this helps. FWIW, between the spinoffs, mergers and splits, I suspect the IRS has little idea what the cost basis is and will accept most any number that looks in the ballpark.
Well, we have tax records back to 1998, but that doesn't help with what happened to his investments between 1984 and 1998. If only the IRS had some sort of statute of limitations.
Amethyst
I have these worksheets I used from 2009 tax year, maybe they'll help you with this.
A............I guess I am a little confused. You seem to be convinced that DH received 18 sh of Lucent in 1996 from ATT spinoff. To me that suggests that you have records showing 18 sh Lucent received in 1996 (and not a purchase of 18 sh of Lucent). If that
is true, shouldn't you also then have similar 1996 records showing ownership of the mother ATT shares. That, of course, still would not establish ATT basis but would at least show the pedigree of the Lucent shares. Your basis may not have any
relation to other folks basis since they depend on when your particular shares were purchased.
In principle with no knowledge of basis, you are supposed to used 0. In practice, you should be able to use the lowest price in the (unknown/uncertain) time period.
Here's a graph of T Graph | AT&T Investor Relations | AT&T
I can't read the time axis...perhaps you can...kind of looks like back to to '80s?
lowest looks something like 7 for T stock.
If you don't have the records and can't get them it looks like you may have to do some estimating, possibly using average prices over the period of ownership.
I have some LU which is now ALU so will have to deal with some of this when I do sell it.
In the past I had to deal with ARCO merging with BP which resulted in BP stock and a cash payout for my ARCO stock. My cost basis is very complex with this as I was an employee and acquired the stock on an ongoing basis through a couple of employee benefit programs and dividend reinvestments. I made some assumptions following the IRS instructions at the time documenting what I did and why for the cash portion. When I sell the BP stock that will even be more fun so it might be something I consider using for a charity donation.
Good luck and I hope you can figure out a reasonable way to approach the issue.
Kaneohe - thanks for hanging in there Husband definitely rec'd 18 shares of LU in 1996. He even has a copy of the LU certificate.
Would it be OK if I used the date of the LU spin-off, and the presumed number of AT&T shares it would have taken (54) to produce 18 shares of LU, to get the AT&T cost basis?
I am assuming that if the IRS does audit, they will have to do some research of their own to prove that we did anything wrong. But you know what they say about "assume."
Poor Mr. A. is chagrined that he didn't keep better records, but there's no point crying over spilled milk.
Amethyst
Quote:
Originally Posted by kaneohe
A............I guess I am a little confused. You seem to be convinced that DH received 18 sh of Lucent in 1996 from ATT spinoff. To me that suggests that you have records showing 18 sh Lucent received in 1996 (and not a purchase of 18 sh of Lucent). If that
is true, shouldn't you also then have similar 1996 records showing ownership of the mother ATT shares. That, of course, still would not establish ATT basis but would at least show the pedigree of the Lucent shares. Your basis may not have any
relation to other folks basis since they depend on when your particular shares were purchased.
In principle with no knowledge of basis, you are supposed to used 0. In practice, you should be able to use the lowest price in the (unknown/uncertain) time period.
Here's a graph of T Graph | AT&T Investor Relations | AT&T
I can't read the time axis...perhaps you can...kind of looks like back to to '80s?
lowest looks something like 7 for T stock.
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
If he owned AT&T and it spun off LU he would have had to make this same calculation when he sold the AT&T. Is it possible he used the original cost basis when he calculated the capital gain back then? If so, the LU cost basis would be zero.
__________________
It's not the cards you're dealt in life but what you do with them that matters
Given that ATT also spun off shares of NCR, ATT Wireless, ATT Broadband, Comcast and/or whatever else they morphed into, it's an accounting mess. Even having paper records of the original ATT purchase, it's quite a challenge to figure the exact basis.
Would it be OK if I used the date of the LU spin-off, and the presumed number of AT&T shares it would have taken (54) to produce 18 shares of LU, to get the AT&T cost basis?
I am assuming that if the IRS does audit, they will have to do some research of their own to prove that we did anything wrong. But you know what they say about "assume."
Amethyst
You can use the presumed number of ATT shares (from the 18 LU) shares
to get the # shares but the cost basis depends on what those shares cost
when they were purchased (not what they were worth at spinoff time).
"assume + IRS"?? I've always heard it said that they don't have to prove that you did it wrong. .....you have to prove that you did it right...i.e. provide the purchase info for cost basis.
If DH got a certificate for the spinoff, does that mean he wasn't having a broker holding the ATT shares. If that's the case, possibly the transfer agent handling ATT shares has a record of the ATT purchase`````````````````````````````````````````` `````````````````````````````````````````````````` ````````````````````````computershares Frequently Asked Questions About the Exchange Process | AT&T Investor Relations | AT&T
contact info at bottom of page
btw....I empathize w/ your dilemna. My solution for these is to hold
until I'm gone. Then the survivor gets a stepup in basis and all the unknowns and mysteries don't matter anymore.
Amethyst - my father had similarly old ATT holdings, which as you know gave birth to Lucent. He sold the Lucent shares in 2011. When he told me the effort he had done to calculate the costs basis, he seemed proud to have figured out the puzzle. His calculations put the cost basis for each such Lucent share at $44.81. Hope this helps. FWIW, between the spinoffs, mergers and splits, I suspect the IRS has little idea what the cost basis is and will accept most any number that looks in the ballpark.
I agree that anything close will satisfy the IRS. I know I had perfect records of transactions in Quicken, used Turbo Tax used all the w**ksheets and have kept my fingers crossed for 8 years.
Hmm, does that work for surviving spouses, too? The shares are all in his name, after all.
No, I do not want to speed up the process, but he is older than I...
A.
Quote:
Originally Posted by kaneohe
Y My solution for these is to hold
until I'm gone. Then the survivor gets a stepup in basis and all the unknowns and mysteries don't matter anymore.
__________________ If you understood everything I say, you'd be me ~ Miles Davis 'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
I can do nothing about that.
Quote:
Husband definitely rec'd 18 shares of LU in 1996. He even has a copy of the LU certificate. 
Linear Mode
