Cost basis

Forum|Forum|3 years ago
March 5, 2023
1 reply
0 views

My broker used the adjusted stock price to calculate cost basis of stock purchased through the dividend reinvestment program and this was reported to the IRS. My quarterly statements show the actual stock price. Since I sold the stock at a loss (based on the quarterly statement stock price) but the adjusted stock price is lower creating a gain instead of a loss I will be paying more tax if I used the cost basis shown in the broker statement. The stock I sold goes back more than 10 years and I don't really want to fix every quarterly reinvestment price, but the capital gain difference I estimate is substantial. My "broker's" response (Computershare) is to suggest I get the help of a Tax advisor to understand cost basis instead of explaining why they used adjusted stock price. Any suggestions?

Not A Product Question

Best answer by JohnB5677

You do not have to go back and fix anything your broker gave you including the quarterly statements.

Post the 1099-B exactly as your broker sent it to you. This will match what the IRS has.

To enter your stock transactions:

Start at Federal
Wages and Income
Scroll to Investments & Savings
Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) [Start or Revisit]
If you already have an entry, select the appropriate broker or add another account.
Select your broker or follow the interview.
As you enter the dates and proceeds, there is a check box for The cost basis is incorrect or missing on my 1099‑B
Follow the interview to use this option to correct any errors on a cost basis.

JohnB5677Answer

You do not have to go back and fix anything your broker gave you including the quarterly statements.

Post the 1099-B exactly as your broker sent it to you. This will match what the IRS has.

To enter your stock transactions:

Start at Federal
Wages and Income
Scroll to Investments & Savings
Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) [Start or Revisit]
If you already have an entry, select the appropriate broker or add another account.
Select your broker or follow the interview.
As you enter the dates and proceeds, there is a check box for The cost basis is incorrect or missing on my 1099‑B
Follow the interview to use this option to correct any errors on a cost basis.