The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: The Cost Basis Crisis||Date: 7/12/2006 1:47 PM|
|Author: whyohwhyoh||Number: 87762 of 125698|
Just got a letter from the IRS on a sale of stock in 2004.
I only had proceeds of $2.36 (after selling commission) from the sale of a spin-off company stock and I was too lazy to figure out the cost basis (thought it was small) so I didn't even put it on my Sch. D. So, IRS wanted me to pay tax on the $2.36 gain, assuming a cost basis of zero dollars.
Well I went through the process of calculating the cost basis, and the spin-off company was originally larger than I thought. Cost basis was actually a bit over $200, so I am getting a decent refund for my time involved in researching the cost basis. Spin-offs are more complex.
And the IRS is out money for pinging me about it, although they did find $475 of under reported income... a 1099 I never received.
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