Stock Basis 1968

[philly62]

How to figure cost basis on stocks from 1968? I was gifted with one share of Kellogg Company stock by my Mother in 1968. It has sat in a drip fund until August 2024 when I sold the all the shares. Broadridge, the holding company, only gave me cost basis from 2011 to 2024, leaving me with some $3000 of uncovered proceeds. What to do?

 

[obsessed]

Have you tried contacting Kellogg’s investor relations? They might be able to provide the historical data you need (historical dividends and corresponding share price).

 

[GrayHare]

For some reason I always find this sort of thing confusing. If you were gifted the original share, your cost basis is $0, no?

 

[frank05]

If you are in the 0% capital gain territory just set the purchase price as 0.

 

[philly62]

Good idea, but now I have to wrestle with Turbo Tax.....

 

[philly62]

For some reason I always find this sort of thing confusing. If you were gifted the original share, your cost basis is $0, no?

How to prove? I do have a copy of the original stock certificate.

 

[philly62]

Have you tried contacting Kellogg’s investor relations? They might be able to provide the historical data you need (historical dividends and corresponding share price).

Good Idea, but Broadridge does not have records before 2011!

 

[braumeister]

I think the suggestion was more likely to contact Kellanova (which is what the Kellogg company became in 2023). They kept the K stock symbol.
investor.relations@kellanova.com should be a good starting point.
Phone is 269-961-2800

 

[GrayHare]

How to prove? I do have a copy of the original stock certificate.

There's no need to prove a $0 cost basis since it is assumed if you have no documentation that shows otherwise.

 

[RunningBum]

For some reason I always find this sort of thing confusing. If you were gifted the original share, your cost basis is $0, no?

No,the cost basis is what the person who gifted it to you had. So finding the price of a share in 1968 isn't the right thing unless the gifter bought the share then and gifted it to the OP. But it's not 0.

 

[joesxm3]

Doesn't each drip add to the basis?

 

[Texas Proud]

Each dividend adds to the basis...

I agree that is this does nothing to your taxes owed (but it can affect ACA credit) then just put the basis down that they gave you... no need to split out all the dates etc...

 

[philly62]

Thank-you all for the input. I will try Kellanova again, The 0 things is not working on Turbo Tax.

 

[joesxm3]

Try basis $0.30 in Turbo Tax. It might round down.

 

[MRG]

As I remember, and I'm probably wrong, pre-brokerage tracking cost basis was on your honor. The IRS doesn't have the records either......

 

[obsessed]

It's possible that their investor relations already has a spreadsheet model that can calculate this for you. I'm sure your situation is pretty common for a stock like this.

My rough math assuming linear gains and dividend rates puts your uncovered basis at no more than $1,000. Like another poster said, you can just enter a minimal amount so Turbo Tax can proceed and pay tax on the whole amount.

 

[GrayHare]

Getting the basis figured to the penny is probably not worth the effort relative to the potential tax savings. For example, investor relations, if they will help at all, will want to know the exact date your Mother purchased the share.

I had a few very old stock shares for which the cost basis was all but impossible to calculate. To simplify the matter, I donated those shares to charity because that erased the need to determine the basis.

 

[Sunset]

OP - out of interest, did you have about 39 shares in the account when you sold them ?

Did it drip you a tiny percent of a share each year until it showed up as a share ?

Interesting issue, doing quick searches doesn't go back that far. I saw back to 1985 when it was $1.66 / share at the beginning of the year.

 

[philly62]

OP - out of interest, did you have about 39 shares in the account when you sold them ?

Did it drip you a tiny percent of a share each year until it showed up as a share ?

Interesting issue, doing quick searches doesn't go back that far. I saw back to 1985 when it was $1.66 / share at the beginning of the year.

There were more than 39 shares and this account was DRIPing for 56yrs. Lots of splits and now spin offs. Some have suggested giving it to charity, but I want to give to my grandnephew's college fund. So I want as much money as possible.
I could use that $1.66 as reasonable basis. And, yes it did accumulate every quarter. Oh, and I have copies of the original stock certificate from 1968. Thanks for looking back!

 

[Texas Proud]

Do not put in zero... put in what they said your basis is...

Put ALL of your shares in one line... so total sales price minus what you have been told is your basis and you have a gain... no way any tax program will not allow this...

 

[SecondCor521]

There were more than 39 shares and this account was DRIPing for 56yrs. Lots of splits and now spin offs. Some have suggested giving it to charity, but I want to give to my grandnephew's college fund. So I want as much money as possible.
I could use that $1.66 as reasonable basis. And, yes it did accumulate every quarter. Oh, and I have copies of the original stock certificate from 1968. Thanks for looking back!

If you're selling all of the shares, then your basis is the cost of the original share *plus* all of the dividends used to purchase additional lots, adjusted appropriately for any splits and spinoffs.

From 1968 with that kind of history, honestly I really doubt shareholder relations is going to want to help with that level of complexity.

I would recommend donating this stock to charity then contributing an equal amount of cash from somewhere else to the college fund. If you're going to insist on keeping it and selling it, I would use a basis of $0 (which any tax software should be able to handle). I don't think that it will be worth the hours of your time and the hassle to establish a more accurate basis.

Another sort of compromise option is to make reasonable estimates based on what you know. I still wouldn't do that, but it's sort of a midway point between $0 basis and trying for 100% accurate basis.

 

[Koolau]

As I remember, and I'm probably wrong, pre-brokerage tracking cost basis was on your honor. The IRS doesn't have the records either......

I think the issue is that the IRS doesn't have to prove you wrong but you have to prove yourself right. I could be wrong on that as I've never been asked to prove basis.

 

[ERD50]

For some reason I always find this sort of thing confusing. If you were gifted the original share, your cost basis is $0, no?

No. Your cost basis is the price on the day it was gifted.

Maybe you are thinking about the fact that your gains would be zero on the day it was gifted?

 

[ERD50]

... I would use a basis of $0 (which any tax software should be able to handle). I don't think that it will be worth the hours of your time and the hassle to establish a more accurate basis. ...

Agreed. I did find a price going back to 1973, of $1.67, Aug 2024 is ~ $80. I'd assume the 1968 price is lower. So the delta of using something like $1 cost basis and $0 cost basis means you might have a gain of ~ 1/80th more with the 0$ basis - and that might be taxed at only 15%, and some/all may be zero tax rate anyhow, depending on your other income. Not worth the foort most likely.

Dividends are a larger portion than that, so if you have a record of those, it would be reasonable to add those to the cost basis (reducing the total gain). Even just add in the divs you have a record for, even if it isn't all of them. I don't see how the IRS can question that (well, they might question it, it's unlikely, but you'd be on solid ground). Yahoo has divs going back to 1973, but you'd also need to know how many shares you had, if you don't have the div records. Even the last 10 years would be roughly $20/share in divs (~ $2/share annually) - so now you are talking something that might be significant.

https://finance.yahoo.com/quote/K/history/?period1=99153000&period2=1741876243&frequency=1mo&filter=div

So first, with zero basis, how much tax is due (add and remove it in your tax program, to see the delta with all other taxes/deductions entered)? If it is insignificant, just use $0 basis. If it is significant, see what you can find for divs.

 

[Montecfo]

For some reason I always find this sort of thing confusing. If you were gifted the original share, your cost basis is $0, no?

No

No. Your cost basis is the price on the day it was gifted.

No. The cost basis is generally the basis in the hands of the person making the gift OR FMV at the date of the gift, if lower.

Now, if the stock was received from an estate then the basis is the FMV at date of death or alternate valuation data.