Prudential's Demutualization

Forum|Forum|5 years ago
December 20, 2020
1 reply
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My father received shares of Pru stock as a direct result of Prudential's demutualization. And the cost basis of those shares is zero. He gifted those shares over to me. When I decide to sell those shares. What will my cost basis be?

Tax Advice

VolvoGirl

Employee

Your cost is the same as his cost. Now if you wait and inherit the shares you get a step up in value at the date of death. But with a gift your cost is the same as the giver.

A

anthony340Author

Employee

This is a reply I got back in 2008 from Computershare, Prudential's transfer agent when ask what my cost basis would be.

" On December 18, 2001 when the account was created, the closing price was $29.95 per share. However, your cost basis depends on how you acquired your shares of Prudential Financial common stock. If you received shares as a direct result of Prudential's demutualization, it is our understanding the cost basis of those shares is zero".

This is how my father received these share. As a result of Prudential's demutalization. He did not buy them from a brokerage firm. I filled out a transfer of ownership form on 4/18/2006. When finalized I became the owner of the stock on 04/25/2006.

So my father had no cost because he did not buy them from a brokerage firm. So if his cost basis is zero then my cost basis would also be zero?????