Weird at&t, bell south & lucent tax question

[landover]

Worksheets

You can take a look here, this is a group for Lucent ERs. There are some worksheets and documents for calculating complex cost basis, and if one has ESPP then it is really complex.

http://groups.yahoo.com/group/lucent5-5/files/

 

[Amethyst]

Thanks Landover. We are/were government employees, so our notion of an ESPP is buying U.S. savings bonds!

Things could be worse. This is a relatively small amount of $$ I am fussing over (~$5K capital loss). I am thinking of a woman I used to work with, who bragged about the huge amount of LU stock that her grandmother left her, and that she was going to pass to her daughter. She retired in 1999, so I'll never know if she sold the LU in time.

You can take a look here, this is a group for Lucent ERs. There are some worksheets and documents for calculating complex cost basis, and if one has ESPP then it is really complex.

http://groups.yahoo.com/group/lucent5-5/files/

 

[kaneohe]

. This is a relatively small amount of $$ I am fussing over (~$5K capital loss).

A..........actually aren't you fussing about a lot less than this? My impression is that the 18 sh LU are only a small part of the total loss? and except for those 18 shares, you do have complete documentation ?

If so, I'm estimating you are fussing about:
18 sh LU
ATT sh price from link I gave you (you need to toggle the time scale to
"all data" looks like a range of 5 to 60. LU sh price allocation about 28%
of ATT cost basis AT&T Tax Information

so you are fussing about a difference in tax loss of
18 sh * 55 price variation in ATT * 28% LU part of cost basis <= $300
Assuming LTCG rates go back to 20%, the aftertax result is <= $60
perhaps enough for 1 nice dinner so an interesting exercise in
"where the heck did those shares come from" but keep life in perspective


Since the price range is 55 (5 to 60)

 

[Amethyst]

Kaneohe,

You're correct, I have documentation for everything except the parent AT&T of the 18 LU shares. I think the AT&T may have originated with a teeny bequest of shares from his Mother. The "fuss" is really about satisfying the IRS if we are ever audited. Thanks for your patient explanations.

Confusing the whole issue was a bunch of Bell South shares that became AT&T in 2007 - descended from a tiny Bell South bequest from his mother - How she could leave him both AT&T and Bell South, without dying at 2 different dates, is another mystery. We had probably better just leave the AT&T to our estate, especially since it will probably morph into 10 different companies by then, or maybe disappear.

Amethyst

A..........actually aren't you fussing about a lot less than this? My impression is that the 18 sh LU are only a small part of the total loss? and except for those 18 shares, you do have complete documentation ?

If so, I'm estimating you are fussing about:
18 sh LU
ATT sh price from link I gave you (you need to toggle the time scale to
"all data" looks like a range of 5 to 60. LU sh price allocation about 28%
of ATT cost basis AT&T Tax Information

so you are fussing about a difference in tax loss of
18 sh * 55 price variation in ATT * 28% LU part of cost basis <= $300
Assuming LTCG rates go back to 20%, the aftertax result is <= $60
perhaps enough for 1 nice dinner so an interesting exercise in
"where the heck did those shares come from" but keep life in perspective


Since the price range is 55 (5 to 60)

 

[justplainbll]

Amethyst,
Are you talking about 18 shares of LU or 18 shares of ALU?
I believe 18 shares of ALU would have come from 93 shares of LU.
93 shares of LU would have been spawned from 287 shares of T.

 

[meierlde]

Kaneohe,

You're correct, I have documentation for everything except the parent AT&T of the 18 LU shares. I think the AT&T may have originated with a teeny bequest of shares from his Mother. The "fuss" is really about satisfying the IRS if we are ever audited. Thanks for your patient explanations.

Confusing the whole issue was a bunch of Bell South shares that became AT&T in 2007 - descended from a tiny Bell South bequest from his mother - How she could leave him both AT&T and Bell South, without dying at 2 different dates, is another mystery. We had probably better just leave the AT&T to our estate, especially since it will probably morph into 10 different companies by then, or maybe disappear.

Amethyst

At the split up one retained shares of the original AT&T as well as received shares of the baby bells and Lucent. Recall that at that time it was thought that AT&T would win (Note that todays ATT is really Southwestern Bell, which then bought Pacific Teleseis, Ameritech, as well as Bell South, and finally bought out AT&T, keeping the AT&T name in the process.

Note that if the estate went thru probate there may be an inventory filed in the courthouse with the value, or possibly a letter somewhere from the estate turning things over. (Depending on how much of a pack rat folks were) You probably could not go to far wrong if you know the year to take the average value for the stock for the year of death.

 

[kaneohe]

I suppose you could ask the executor of DH's mom's estate. If it was
DH. tho...... you might be up a creek w/o the paddle .
This part (18sh) sounds like small potatoes tho and I would hope IRS would
have the sense not to aim the big cannons your way but to use them more efficiently elsewhere so if no brilliant detective appears, I'd be inclined to
use some historical number based on mother's passing date or some other reasonable time frame

you can find historical quotes here Historical Quote | AT&T Investor Relations | AT&T

 

[clifp]

I suspect that is a very common problem. My dad inherited 30 shares of the original AT&T from his aunt or perhaps great aunt in the 1960s. As best as could determine (I did this about a dozen years ago) the stock dates from the 1920s. Dividends were reinvested until the mid 90s and of course the spin off and merge among the baby bells are legendary.

After spending a couple of days trying to figure this stuff out I decide the task was pretty hopeless and have read at least 1/2 dozen answer from financial columnist over the decade who basically said the same. Virtually nobody has accurate records.

My mom has 25 shares of ALU and 1094 AT&T shares(she made some smart/lucky choices in the original baby bell spin off) . In my case I decided that the AT&T, ALU stock won't be sold until she dies. However if I was you since ALU is currently trading at $2.45, and 18 shares is worth less than <$50 I'd pick a random number say $1.23 for the basis of the stock and move on.

On the other hand the AT&T stock is worth $33K and if I sold this I'd have to do make a better wild ass guess.

 

[Amethyst]

Worse. It was his sister and she's passed away long since

I suppose you could ask the executor of DH's mom's estate. If it was
DH. tho...... you might be up a creek w/o the paddle .

This part (18sh) sounds like small potatoes tho and I would hope IRS would
have the sense not to aim the big cannons your way but to use them more efficiently elsewhere so if no brilliant detective appears, I'd be inclined to
use some historical number based on mother's passing date or some other reasonable time frame

you can find historical quotes here Historical Quote | AT&T Investor Relations | AT&T

That sounds sensible. You know, it's not that I expect Sherlock on my doorstep over this issue; it's just that when the audit wheel spins, sooner or later, it points to you So it pays to be meticulous.

Amethyst

 

[JakeBrake]

A visual aid.

 

[justplainbll]

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.

Amethyst

However if I was you since ALU is currently trading at $2.45, and 18 shares is worth less than <$50 I'd pick a random number say $1.23 for the basis of the stock and move on.

Big (5X+) difference between 18 shares of LU and 18 shares of ALU.