Twist on sale of DRIP stock

[FEDUKE404]

Years ago client purchased stock (not a mutual fund) and made monthly investments/reinvested dividends along the way. After some significant paper shuffling, the cost basis for all shares purchased has been determined.

During 2008, all shares in the account were sold in a single transaction.

It turns out there were fifty shares from the account that were donated to charity a couple of years ago. Form 8283 was properly completed at the time, using FMV of the stock on the dates of transfer to the charity.

So how do I account for the donated shares (to adjust the overall cost basis)? My best guess is to go back to the original purchase date, working forward to find "enough" shares to cover the donated shares, and then reduce the overall cost basis by that dollar amount. More or less, a FIFO approach for the cost basis for the shares sold during 2008.

Does this sound like a reasonable plan?

Thanks.

FE

[ChEAr$]

My hat's off to you

Years ago client purchased stock (not a mutual fund) and made monthly investments/reinvested dividends along the way. After some significant paper shuffling, the cost basis for all shares purchased has been determined.

During 2008, all shares in the account were sold in a single transaction.

It turns out there were fifty shares from the account that were donated to charity a couple of years ago. Form 8283 was properly completed at the time, using FMV of the stock on the dates of transfer to the charity.

So how do I account for the donated shares (to adjust the overall cost basis)? My best guess is to go back to the original purchase date, working forward to find "enough" shares to cover the donated shares, and then reduce the overall cost basis by that dollar amount. More or less, a FIFO approach for the cost basis for the shares sold during 2008.

Does this sound like a reasonable plan?

Thanks.

FE

for having reconstructed costs. It's a real chore, and I hope you didn't have to account
for splits.

If you've taken the time and pains to do the math, I think you're entitled to use any
basis you want to! (grin) But yes, FIFO prevails.

[FEDUKE404]

Just DRIPping along, I guess

for having reconstructed costs. It's a real chore, and I hope you didn't have to account for splits.

If you've taken the time and pains to do the math, I think you're entitled to use any
basis you want to! (grin) But yes, FIFO prevails.

Well, the heavy duty work was already done (thank goodness for computers!) with a bunch of documents going "into the prior millennium." It was only in the early years that monthly automatic purchases were made....after that everything was on cruise control with simple DRIP income.

I thought I was home free until I found out that I had accounted for more shares than had been sold in 2008.....

But thanks on the FIFO agreement!

FE