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March 12, 2023
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Cost basis when bonds were exchanged

  • March 12, 2023
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In 2019 I bought some corporate bonds with a given CUSIP, we'll call it CUSIP A. In 2020, the company who issued those bonds executed a voluntary exchange offer. I chose to participate. The bonds were replaced in my brokerage account by new bonds with a different CUSIP, we'll call it CUSIP B. In 2022 I sold the entire position of CUSIP B. Does it make sense to simply use the cost of acquiring the bonds with CUSIP A back in 2019, as the cost basis when selling the bonds with CUSIP B?

    Best answer by JohnB5677

    Yes, the basis of CUSIP B will be CUSIP A original price plus any broker charges you may have incurred.

     

    "The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock.

    You must adjust the basis of stocks for certain events that occur after purchase."

     

    Publication 551 (12/2022), Basis of Assets

     

    If this does not completely answer your question, please contact us again and provide some additional details.


    We are having an Ask the Experts event specifically about Crypto transactions on 03/15/23. Please register for it here.

     

    1 reply

    JohnB5677
    JohnB5677Answer
    March 13, 2023

    Yes, the basis of CUSIP B will be CUSIP A original price plus any broker charges you may have incurred.

     

    "The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock.

    You must adjust the basis of stocks for certain events that occur after purchase."

     

    Publication 551 (12/2022), Basis of Assets

     

    If this does not completely answer your question, please contact us again and provide some additional details.


    We are having an Ask the Experts event specifically about Crypto transactions on 03/15/23. Please register for it here.

     

    **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
    steinar57Author
    March 18, 2023

    Thanks for confirming - appreciate it!