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To make a long story short:

I recently discovered that I have a fair amount of stock coming to me. It was a gift from my grandparents under an UGMA-type trust.

This stock, however, is in certificate form -- not in a brokerage. And the certificates got lost. Then the company got bought out, and all stockholders of the old company were asked to return their certificates in exchange for an equal value of stock in the buying company. However, since mine was lost, that never happened.

Finally my parents have applied for new certificates. And apparently, as soon as that happens, I am going to receive all of the back dividends that were paid since the buy-out.

So, in terms of taxes, how do I handle these dividends? Do I need to refile returns for the last several years, or should all this money just show up on my '98 return?

Also, as a second question: I need only pay capital gains taxes on gains made on the stock between the time it was given to me and the time that I actually sell it, right? (Rather than between the original purchase date back in the '40s and now...)

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