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Subject:  Two Questions about Cost Basis Date:  8/13/1999  8:11 PM
Author:  jahen Number:  18156 of 127753

(Note: This is a fairly long post, so I've divided it up into a general question up front, some background information, and then a more specific question. Thanks in advance for any help.)

Question #1: I am having to replace some shares of Citigroup that I hold in certificate form. The cost for replacing lost certificates is 2% current market price/per share. Can I add this expense into the cost basis?

Background: When I was 14 (I am now 29) my parents gave me some shares in a company called "American Can Co" in order to teach me about investing. The shares were registered under the UGMA with my father directing the account and were issued in certificate form.

I followed the fortunes of this company closely for a while, but by the time I reached college I rarely give it more than a passing glance. While I was in college my father became rather ill and this small holding was the last thing on anyone's mind.

Now here comes the confusing part. American Can was destined to undergo a number of changes over the years. It shed its core packaging business at some point and refocused instead on financial services, changing its name to Primerica, which was later acquired by Travelers (which as you probably know has merged with Citibank to form CitiGroup). One time when I was home from college, my mother handed me a pile of old mail which included a notice about one of these acquistions and instructions to surrender the shares I was holding or forfeit them (at least that's what I thought it said). As the letter was old, the surrender date was well in the past by the time I received it and I assumed that I had forfeited the shares (again, pursuing the fate of my stake in this company was hardly on my mind at the time).

After my father died, my mother sold the business (the address at which the trust account was registered)and we heard nothing from American Can/Primerica/whatever again.

That is until about 3 months ago when I was contacted by CitiGroup to verify my current address. It turns out that not only did I still hold the shares, but over the years they had split and split again (and again) into a nice little stake(thanks Mom and Dad!).

Now I am in the process of having the shares re-issued in my own name (since I am well past the age of ownership) and re-obtaining the certificates that I no longer hold (the original was lost in the mess of paperwork that resulted from the sale of the business, the additional ones were mailed to an address we no longer used) hence my question above concerning cost basis. Once I have accomplished the account transfer and received the new certificates, I plan to deposit them into my current brokerage account.

Now onto my second question.

Question #2: Finding the records concerning the original purchases would be next to impossible (I doubt that my mother retained them). I do remember, however, the original purchase price. If I ever sell (I'm not saying that I plan to, I'm just curious) can I use this figure (somewhere around $3.50/share, adjusted for splits) plus the broker's commission (let's say $35 as my parents would have used a discount broker) as the cost basis?

Thanks for any help!

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