I own stocks that were given to me as a gift from my former employer that was privately held. The company was then bought by a public company and the stocks were converted to that companies stock. I sold the unrestricted stock last year after holding on to it for over a year. My question is will I be able to claim the loss on the stock I sold base on the price on the date it was issued or will I have to claim it as a gain because it was a gift?

I have a second question. The rest of the stock that was issued was restricted. A third of it has vested, if I sold this stock would it be tax based on the date the restricted stock was issued or the date it vested?

I read Charlie48K's reply and have a different perspective.

As to your first question, I would check with your company and/or review your paycheck stubs from the time you received the stock as a "gift". If this happened with my employer, I would expect the gifted stock to be considered a bonus and be taxed on the fair market value of those shares as of the date of the gift. This in turn would result in a line entry on my paystub with correspondingly higher taxes withheld. If this is the case with your situation, your basis would be that fair market value as of the date of the bonus.

As to your second question, I would think it would be the later date. Again, check your paystubs for evidence of taxation on those shares when they became unrestricted; you probably were taxed at the time they became unrestricted. If you're talking about stock options as Charlie48K thinks, those are a different beast; check the options board here at the Fool for more information on those.

malakito.