We just received a 1099-B reporting a very small amount of proceeds $4.42. This is because my husband's company went through a merger last year and his old company stocks were exchanged into the new combined company stocks, resulting in the sales of fractional shares.

We think we need to file schedule D and these are short term gains/losses (the company stocks were held less than a year before the merger occured). The problem is that all the documents we have (the 1099-B, transaction confirmation) say nothing about exactly how many fractional shares were sold. We also have no idea what to put for sales price (we guess $4.42 here) or cost basis. In fact, we don't even know if we incurred a gain or a loss on these fractional shares.

Please help!

Dixu:

This amount is so small that you can put virtually any amount under $10 as the cost and no one at the IRS will care.

Put $4.42 as the sales price.

ATE,

This seems to be a year of inconsequential amounts (refering back to my other post on agent admin fee and 1099-INT) generating lots of paper work for us.

Many thanks for your help. We are terrified of making a mistake on even the smallest amounts and have the IRS come after us. :)

The IRS is not ominpotent and does not have unlimited resources. They also have bigger fish to fry than you.

Claim what you think is a fair basis and get on with your life!