Elderly client, 1099-B proceeds, no cost provided

[Janitor Bob]

elderly client had a mutual fund with a certain bank for many, many, years. a few years ago she moved it to a different bank. Client received a 1099-B from the new bank showing gross proceeds from the sale of many shares of bond fund. $8,000 proceeds (non-covered, no cost reported, term unknown). I know these are long term because client told me she had the fund for many years prior to moving to the new bank. How do I find the cost/basis of these shares sold? Client has absolutely no idea, apparently the new bank that sold the stuff has no idea.

Clients only other income is $21,000 social security, a small pension, some interest and dividends...all of which added to an $8,000 taxable gain, would still leave her with zero taxable income....so no taxes due.

Should I tell client to pursue new bank/old bank to try to come up with costs on these shares or just let it go as a $8,000 gain?

[RitaB]

Long term capital gain rate will be zero either way. I would let it go.

[Guest Taxed]

If you have a copy of the 1099-B with the sales it will give you the ticker symbol or Cusip#. Then go to www.costbasis.com and plug that in with the approxmitate date the client acqired the fund. It will give you the share price. What you are missing is any commission expense etc. But that is much better than swinging in the air!

[MsTabbyKats]

Bond fund would have monthly re-investment....how many year x 12 months.....guesstimate. It would be impossible to get an accurate cost basis. Probably close to a wash.

Reasons like this is why we have all these new rules.

[Janitor Bob]

Yes...this would be almost impossible to accurately assign cost. Is it acceptable for me to look of the average cost of the fund shares over a period of years (or at least one year) and assign that cost to all shares sold?

Client just brought me another 1099-R.....this one, along with a gain of $8,000, would cause her to owe approx. $80 in Fed taxes.....So now I have incentive to reduce that gain. However, I want to do it in a way that would be acceptable to IRS. A CP2000 from IRS might just be the nail in this ladie's coffin.

[Jack from Ohio]

... Is it acceptable for me to look of the average cost of the fund shares over a period of years (or at least one year) and assign that cost to all shares sold?

YES

[RitaB]

Yes...this would be almost impossible to accurately assign cost. Is it acceptable for me to look of the average cost of the fund shares over a period of years (or at least one year) and assign that cost to all shares sold?

Client just brought me another 1099-R.....this one, along with a gain of $8,000, would cause her to owe approx. $80 in Fed taxes.....So now I have incentive to reduce that gain. However, I want to do it in a way that would be acceptable to IRS. A CP2000 from IRS might just be the nail in this ladie's coffin.

LTCG rate is zero for her. It's making some of her SS benefits taxable, isn't it? Yes, I would take a stab at it, looking at enough data to be sure I wasn't using a really unusual year. She only needs the cost to about 1850, right? I'd say that would be very easy to justify.

[Janitor Bob]

Exactly, RitaB

[kcjenkins]

SWAG it, JB.

[RitaB]

Drive it like you stole it.

Run like Julia Roberts is waiting at the finish line with a super stuffed burrito.

[Ray in Ohio]

SWAG it, JB.

I'll have a SWIG of dat too... if yer passin it around.

[kcjenkins]

SWAG = Scientific Wild A$$ Guess

SWIG = What we all need on April 16th. [May need it now, but not a good idea yet]