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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: Re: A Brain-Teaser ESOP Tax Question Date: 7/18/2014 5:30 PM
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foo1bar:

<<If the person is disposing of all of the shares, why is matching lots of any consequence?>>>

"If you're disposing of all the shares you still have to have the total basis."

Agreed, and which is why I wrote - "As long as long-term and short-term holdings can be differentiated (and all shares are sold), then one needs only total basis for long-term holdings and total basis for short-term holdings. "

"And for that you either figure out which lots were bought when (and therefore you know what those shares cost)
-OR- you have to figure out the total amount deducted from paychecks to buy the shares. (and be sure that you haven't already disposed of some of the shares covered by the paychecks you're adding up)"


OP wrote that the latter information exists - "In this instance, they have the table of purchase prices over the years based on information provided by the company. However, the shares have been through 3 or 4 different brokerages, as the company changed custodians over the years. Matching the lots will be virtually impossible, other than taking the monthly amount contributed and backing into the number of shares that would have been purchased each 6 months or year and backing into the basis taking into account conversions, splits and reverse splits."

Splits and reverse splits do not change total basis (only basis per share). I am not entirely sure what OP means by account conversions.

"If you've sold some shares, or have incomplete records for the paychecks, the first option may be easier to do."

I agree that my response did not address potential prior sales. I believe (but do not want to check) that OP previously indicated that no sales had taken place. I concur that if prior sales were made, then LIFO would need to be applied (unless the seller made a specific election at time of sale). As noted, OP stated "they have the table of purchase prices over the years".

Regards, JAFO
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