old stock

[Possi]

My client bought Dominion stock beginning in 2003 ($50/month forever) and she has sent for a detailed statement so that I can pull the basis for first 112 shares she sold last year.

Until then, I need to slap something together and file an extension.

I know that in August of 2003 the shares were about $60/share, but I can't come close to guessing the real figure. I don't know if she had a gain or a loss.

Any ideas on getting this extension out of here with some figure in there?

[FEDUKE404]

Make a good guess for now

My client bought Dominion stock beginning in 2003 ($50/month forever) and she has sent for a detailed statement so that I can pull the basis for first 112 shares she sold last year.

Until then, I need to slap something together and file an extension.

I know that in August of 2003 the shares were about $60/share, but I can't come close to guessing the real figure. I don't know if she had a gain or a loss.

Any ideas on getting this extension out of here with some figure in there?

Dominion WHAT? (stock symbol?). There are many out there....

Assuming there was no DRIP (probably a poor assumption) you should be able to call up a stock chart on Yahoo and make a good guesstimate of cost basis for now. You can deal with actual costs post-April 15th, and deal with FIFO issues at that time. Not knowing yet which company is involved, remember you may need to deal with stock splits et al. Things could really get testy if there were spin-offs/buy-outs/etc, but the company website usually has detailed worksheets to guide you through that maze.

I don't quite understand your comment about "detailed statement" which should already have purchase dates/costs on it.

FE

[Burke]

It's Dominion Resources and it sounds like a DRIP or ESSP. She can get the detailed info from the company. (NYSE code symbol "D.") There's a 2-1 split in there since she started buying. If she paid in what her tax liability was last year, don't worry about it. Just put her withholding on the extension and show no tax due.

[FEDUKE404]

You must pay balance by April 17th

It's Dominion Resources and it sounds like a DRIP or ESOP. She can get the detailed info from the company. (NYSE code symbol "D.") There's a 2-1 split in there since she started buying. If she paid in what her tax liability was last year, don't worry about it. Just put her withholding on the extension and show no tax due.

Huh? Your suggestion might eventually make the Form 2210 (underpayment) penalty go away, but does not address the more important issue that any balance due must be paid by April 17th to avoid interest charges etc on the taxes not paid by that date.

I recall D had some interesting stock break-up issues in the past, but apparently that was before your client starting purchasing shares. The single 2:1 split should present no problems. I might just make a guess at $40+ (or $80+ pre-split) per share cost basis, sleep well, and work out the gory details later. The dollar amount you assign now would be related to how long it took her originally to accumulate the 112 (56) shares recently sold.

FE

[JohnH]

I'd do two tax estimates, one based on a reasonable basis estimate and the other based on a very low basis estimate. Then give the client both tax estimates and ask which one she wants to pay on Apr 17.

If she chooses the high one "just to be safe", then the final return will probably have a nice refund. If she chooses the low one because shes doesn't want to let go of the money, then she has no reason to complain about the ftp penalty and interest (a total of about 1% per month). Whatever she decides, it's her choice rather than yours. Keeps the responsibility for the decision where it belongs.

After all, she could have brought you the info you needed early in the tax season and none of this would be necessary.

[Burke]

My feeling exactly. It is not up to us to figure out exactly what they owe by 4/15 if they do not have the information provided to us to calculate it in a timely manner. Next week, I am starting triage, and will try to figure out who owes and who doesn't. But that's on the ones that I already have everything.

[Possi]

Glad

...you put this in perspective for me.

I just got basis for 2 clients in the same boat, with old stocks. One is about 50 pages and one is twice as big.

Extensions, for sure.

[Burke]

And I got my usual last minute client who sold his DRIP last year in MARCH, got $20K and he has no basis. Wife talked him in to shredding all his old tax returns (where we could have gotten the div info) just last month. Firm tells him today it will take 7-10 days (working days) to get him the info. He is not happy. Doesn't bother me a bit.