I started a drip account back in 96. Over a period of 4 years, I invested $1,000 in it. Then, I kinda ignored the whole thing. I received 1099DIV’s and filed them every year on taxes. I’m now cleaning up some straggling messes, and sold my 13 shares for $5,000. How do I determine my actual cost basis so I can figure out capital gains come tax time. I did not keep all statements, so I don’t know how to figure how many $$ in Dividends were invested. They would count as cost basis, right? And I’ve already paid tax on those. The company can’t/wont help.
A DRIP account from 1996. How to establish cost basis, capital gains, and taxes
byu/Fo_eyed_dog inpersonalfinance
Posted by Fo_eyed_dog
2 Comments
You’re right, reinvested dividends count toward your cost basis since you already paid tax on them. If you don’t have full records, try pulling old 1099-DIVs or checking with the transfer agent to estimate what was reinvested. If it’s still incomplete, a reasonable good-faith estimate is acceptable, just document how you got there.
Any cost basis before 2012 weren’t tracked. Look up historical price data for these years to estimate your cost basis. Don’t forget to account for stock splits (i.e. use “adjusted close”)