Christian Posted December 19, 2012 Report Share Posted December 19, 2012 A recently divorced lady contacted me in regard to the cost basis of stocks she received in a divorce settlement with her former husband. She will likely sell some or all of this position. She did not purchase any of these shares. The cost basis would be what her former husband paid for the shares some time back. Is this correct. Or is her basis one half of what he paid? Quote Link to comment Share on other sites More sharing options...
Roberts Posted December 19, 2012 Report Share Posted December 19, 2012 It's what the ex-husband paid per share originally. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted December 20, 2012 Report Share Posted December 20, 2012 Plus any reinvested dividends? Quote Link to comment Share on other sites More sharing options...
mcb39 Posted December 20, 2012 Report Share Posted December 20, 2012 IRS (l734) the basis of the transferred property in the hands of the transferee is the transferor' adjusted basis in the property, in the case of a divorce. (Code Sec. 1040(e) The transferee's basis is adjusted to take into account any gain recognized. Quote Link to comment Share on other sites More sharing options...
Guest Taxed Posted December 20, 2012 Report Share Posted December 20, 2012 Each season I run into a similar situation with divorced couples. If the portfolio is being split pursuant to a divorce decree and if you feel that your clients have some disagreement between them when you are doing the taxes, ask to get their attorney(s) give you a call prior to submitting the return. You will save yourself a lot of grief later. Before I did this I used to do amendments right after the season to fix the issue and with this new 8949 form it is no fun if there are a lot of trades. Also my suggestion if you charge by the form only, you may want to consider to charge by the form and time spent for Sch D with these type of issues. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.