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My husband inherited some New England Telephone stock from an uncle in 1961, when he was in his teens. Our first problem, therefore, is as follows:

1) He doesn't know how much stock he got.
2) He doesn't remember when his uncle died. (Feb or March--we're working on this.)
3) Everyone who knows is dead.

New England Telephone was sold to AT&T, and his stock was converted into AT&T stock. He has no clue as to how many AT&T shares he received, or what their value was. He has no certificates. (I should, perhaps, explain that he has been blind since birth, which makes it easier to mislay things.)

Now, AT&T has historical quote information posted on their website going back to 1893, including lots of stuff on the 1984 divesture, but nothing on earlier mergers and acquisitions. Also, this has split 14 ways from Sunday.

We would like to sell the AT&T stock. We asked our accountant and our discount broker how to calculate the cost basis, and they each said to ask the other fella.

How do we calculate the cost basis for this stock? I presume that AT&T probably could tell us how many shares he had back to 1984, but will that be good enough? If they can tell us how many he was issued at the NET acquisition, will that be good enough?

There has to be some way to sell this stock, pay the tax man, and not get in trouble!
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How do we calculate the cost basis for this stock? I presume that AT&T probably could tell us how many shares he had back to 1984, but will that be good enough? If they can tell us how many he was issued at the NET acquisition, will that be good enough?

This is a common sense answer, not an informed tax lawyer/accountant answer. Start with the premise that you are trying to do an honest/reasonable accounting for something where the actual records are lost. I'm assuming, too, that you are not talking hundreds of thousands of dollars here.... the more dollars involved, the more there would be reason to say you should be absolutely precise.

You do know how many AT&T shares you now have in your account, right. Do you know the split adjusted price in February and March of 1961 for those AT&T shares?

I'd be willing to bet that if you took the average of the split adjusted highs and lows of Feb/Mar 1961 you'd be very close to whatever the actual fully researched and documented price ends up being. "Close enough," as the saying goes, "for government work." And that's not meant to be cynical. My point is that the IRS isn't really trying to wring every last penny and then some. They are expecting each of us to be honest and reasonable.

Again, I wouldn't suggest this at all if the number of shares involved are large, because the effect of every cent of difference gets magnified many times over in multiplying by a large number.

mathetes
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Do you know the split adjusted price in February
and March of 1961 for those AT&T shares?

Alas, no. I have no idea what the split adjusted price would be. How do we figure that out?

And no, we are not talking about a large number of shares.

Thanks for the advice, however. If you can point me to a source for the split information, I will do what I can.
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