Stock Basis 1968

[ERD50]

No

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.

Ahhh, thanks, I was conflating 'gifted' with 'inherited'. But that would just make the cost basis likely even closer to zero, so not much practical difference to the OP.

 

[GrayHare]

Thanks for the details, Montecfo. For the OP, the biggest challenge is determining the dividend and quantity of shares purchased via reinvestment for each of the more than 160 uncovered calendar quarters after 1968. Researching that could consume hundreds of hours. Now, I wonder if one of the AI engines has enough data to calculate it.

 

[Montecfo]

Thanks for the details, Montecfo. For the OP, the biggest challenge is determining the dividend and quantity of shares purchased via reinvestment for each of the more than 160 uncovered calendar quarters after 1968. Researching that could consume hundreds of hours. Now, I wonder if one of the AI engines has enough data to calculate it.

It represents the largest opportunity. And dividend history is out there. It would not take hundreds of hours to arrive at a credible estimate. Nasdaq and the Kellogg website will have much or.maybe even all of that data

 

[copyright1997reloaded]

I can't help with the specifics of this but I can relate. I sold some Marriott that I had bought many years before. Splits, spin-offs of a number of things, etc. Because I can get "obsessive" on things like this, I spent a good eight hours researching, looking through my old records in various places. The net result vs. putting in a $0 cost basis was a savings of about $4 for those eight hours of work. But I was DETERMINED to do so. Ugh.

 

[ERD50]

It represents the largest opportunity. And dividend history is out there. It would not take hundreds of hours to arrive at a credible estimate. Nasdaq and the Kellogg website will have much or.maybe even all of that data

It might be much simpler. If the OP just has the actual paid/reinvested dividend records for even the past 10 years, that would probably cover most of it. He wouldn't need to know the number of shares, it would all be a cost against the entire holding, regardless of shares, right? He'd need to report those divs for taxes each year, so if he kept copies of his 1099-DIV, it should all be there. I could go back 45 years, I keep all my tax records.

edit/add: Based on the link I gave earlier:

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

The divs drop from ~ $0.57/Q in 2024, to ~ $0.24 in 2000, $0.11 in 1990 to $0.05 in 1985, so clearly diminishing returns as you go back.

 

[GrayHare]

ERD50, that simplification works if the OP knows all the dividend amounts, and he has not sold any shares prior to the 2024 sale of all shares. That simplification removes the need to know the number of shares purchaed via drip each quarter, reducing the cost basis calculation to
((initial share value) + (total of all reinvested divs)) / (number of shares now held) = (avg cost basis per share)

 

[ERD50]

ERD50, that simplification works if the OP knows all the dividend amounts, and he has not sold any shares prior to the 2024 sale of all shares. That simplification removes the need to know the number of shares purchaed via drip each quarter, reducing the cost basis calculation to
((initial share value) + (total of all reinvested divs)) / (number of shares now held) = (avg cost basis per share)

We need confirmation from the OP, but it does sound like no shares were sold from the first post:

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.

Whether OP has kept at least the tax records of the divs, well, it would be nice to hear back on that.

 

[Montecfo]

It might be much simpler. If the OP just has the actual paid/reinvested dividend records for even the past 10 years, that would probably cover most of it. He wouldn't need to know the number of shares, it would all be a cost against the entire holding, regardless of shares, right? He'd need to report those divs for taxes each year, so if he kept copies of his 1099-DIV, it should all be there. I could go back 45 years, I keep all my tax records.

edit/add: Based on the link I gave earlier:

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

The divs drop from ~ $0.57/Q in 2024, to ~ $0.24 in 2000, $0.11 in 1990 to $0.05 in 1985, so clearly diminishing returns as you go back.

I have those records for myself. But a small amount of googling is much easier.

 

[Koolau]

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).

If you"DRIP'd" using the dividends it gets more complicated for sure. BUT, you've already paid tax on the dividends. If you kept those separate (and spent them or invested in something else) the basis is unaffected by dividends.

 

[philly62]

Thank-you all for your assistance. I did use the Yahoo Finance info ERD50 found for me and figured out a reasonable cost basis that reduced the capital gain. You all were so kind to come up various solutions and I appreciate your time and effort! Happy Tax Season!

 

[FLSUnFIRE]

I had to do something similar for my folks recently. Since dividends are taxable in year received, if you still have your tax returns your Schedule Bs should show the dividends and can be added up... I made a simple spreadsheet and used data from DRIP statements they did have and tax forms -it took some time but was "fun" for me and gave me something to do when visiting. May not have all of them but certainly justifiable basis for those you do have to reduce the tax hit. As it turned out with my folks, after sale, one of the 1099s received surprisingly showed the basis and I was dead-on with their number. These were shares inherited in the 80s and not the 60's though. A few high dividend payers actually had capital losses and offset those that had gains.

 

[ERD50]

I have those records for myself. But a small amount of googling is much easier.

But is it?

Since the divs are being reinvested, you no longer have a single share, so the dividend amounts are increasing over the years. If you go by a dividend history, you need to know your share count, to multiply the div/share times your shares.

 

[ERD50]

If you"DRIP'd" using the dividends it gets more complicated for sure. BUT, you've already paid tax on the dividends. If you kept those separate (and spent them or invested in something else) the basis is unaffected by dividends.

Yes, but check the OP:

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 all the shares.

 

[ERD50]

Thank-you all for your assistance. I did use the Yahoo Finance info ERD50 found for me and figured out a reasonable cost basis that reduced the capital gain. You all were so kind to come up various solutions and I appreciate your time and effort! Happy Tax Season!

But how did you use that info? Do you have the share count for each dividend payout (see my recent post above)?

Do you have the tax records that show the $ amount of divs paid? That's all you need.

 

[Montecfo]

But is it?

Since the divs are being reinvested, you no longer have a single share, so the dividend amounts are increasing over the years. If you go by a dividend history, you need to know your share count, to multiply the div/share times your shares.

The OP began with one share. So I think the answer is "yes".

 

[ERD50]

The OP began with one share. So I think the answer is "yes".

Are you saying "yes, it's easier to google the historic divs"? But the problem with that is, he started with one share, but each DRIP re-investment added a fraction, so no longer one share. And you would not know for certain, w/o records, how much of a share that div purchased, so you'd also need to know the price on the re-investment date. I'm not sure that is the same as the div date. Sounds complicated to me.

 

[Montecfo]

Are you saying "yes, it's easier to google the historic divs"? But the problem with that is, he started with one share, but each DRIP re-investment added a fraction, so no longer one share. And you would not know for certain, w/o records, how much of a share that div purchased, so you'd also need to know the price on the re-investment date. I'm not sure that is the same as the div date. Sounds complicated to me.

Yeah you need pricing data, dividend data, a spreadsheet some basic math and a copy function.

All of these are readily available.

For the pricing data, I would pick a value from approximately the same day each year. That should suffice. You are just looking for a reasonable estimate.

 

[Koolau]

Yes, but check the OP:

Okay, maybe I'm dense but I don't see your point.

My point, any dividends - whether used to buy more shares or taken to do something else have already been taxed. Basis is changed by purchasing more stock with the dividends but no worry about the tax on the dividends per se.

 

[SecondCor521]

Okay, maybe I'm dense but I don't see your point.

My point, any dividends - whether used to buy more shares or taken to do something else have already been taxed. Basis is changed by purchasing more stock with the dividends but no worry about the tax on the dividends per se.

You were saying that the dividends wouldn't add to basis if not reinvested. ERD50 was pointing out that OP essentially said that the dividends were reinvested. I think you're making a different point that is a bit orthogonal to OP's question.

 

[Koolau]

You were saying that the dividends wouldn't add to basis if not reinvested. ERD50 was pointing out that OP essentially said that the dividends were reinvested. I think you're making a different point that is a bit orthogonal to OP's question.

Okay. Thanks.

 

[pb4uski]

At a minimum, cobble together the dividends that you received on those tickets from your tax returns, 1099s, brokerage statements and DRIP statements going backwards as far as you can since if those dividends were reinvested they were part of your cost basis.

Also, there are some services that will calculate cost basis for such situations. I never needed them but was close one time.

BasisPro

BasisPro is a cost basis and wash sale calculator that offers a simple way to determine accurate cost basis-saving time and minimizing risk.

www.wolterskluwer.com

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