[Jameslaw]

Hello

I have a question about stock that was transferred to me by my grandmother just before she passed away. I know that the cost basis will be what ever she paid for the stock originally but the problem is I don't know that information. This happened about a week ago. Do I get a receipt of the transfer from her discount broker and more over will it have the original cost basis on it. Thank you very much. One thing of note it shows the transfer date on my account but @ $0 I am really confused this could be real bad come tax time. Cheers

[ebaines]

You are correct that your cost basis equals her original cost basis, but only if the fair market value on the date of the transfer is greater than her basis. It gets more complicated if the stock lost value between the time she bought it and the transfer date.

To find her cost basis you could (a) ask the executor of her estate if there is a copy of her transaction confirmation or a monthly/quarterly statement from the broker that shows the transaction that would be very helpful, or (b) look up the value of the stock on the date she bought it. You can get historical stock price information from any number of financial web sites - use an average of the high and low for that date. The IRS will most not likely not come after you if you use method (b). One thing to be careful of is to factor in any stock splits (or reverse splits) that may have occurred.

The reason your broker shows $0 cost basis is because he has no other data to go on. Once you determine your cost basis you can let them know what it is.

[sbell2012]

You can very easily calculate that cost basis with the stock, number of shares and year purchased. Go to www.netbasis.com. Minimal fee. Good customer service.