Dates

[erchess]

At some point my Dad bought Southern Company Stock. In 01 Southern spun off Murant Corp. In 06 Murant spun off two of its units. They gave him whole numbers of shares in the new units and $10 in one case and $8 in the other instead of fractional shares. His end of year broker's statement shows basis and losses on the fractional shares. I know that it hardly matters to his return what we do with $18 of income, but he and I both like to handle things in the technically correct way.

First, can we reasonably rely on the broker's statement for basis and proceeds?

Second, what do we put for the date of purchase? Would it be the date he purchased Southern, the date, Murant spun off, or the date of the spin-off from Murant?

[lbbwest]

Dates

First, can we reasonably rely on the broker's statement for basis and proceeds?
Answer: What else would you rely on?

Second, what do we put for the date of purchase?
Would it be the date he purchased Southern, the date, Murant spun off, or the date of the spin-off from Murant?

Answer: Various Long Term

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[GIMoe]

F. I. F. O.

At some point my Dad bought Southern Company Stock. In 01 Southern spun off Murant Corp. In 06 Murant spun off two of its units. They gave him whole numbers of shares in the new units $10 in one case and $8 in the other instead of fractional shares. His end of year broker's statement shows basis and losses on the fractional shares. I know that it hardly matters to his return what we do with $18 of income, but he and I both like to handle things in the technically correct way.

First, can we reasonably rely on the broker's statement for basis and proceeds?

Second, what do we put for the date of purchase? Would it be the date he purchased Southern, the date, Murant spun off, or the date of the spin-off from Murant?

Brokers statement should be very reliable.

As for the dates, that depends on which block of stock he sold. If he did not specify, then it is First In First Out. If he sold the stock that split then it is the date of the split. Another method would Various - Long Term for anything other than the Murant spin off in 06. If he sold that stock use date of spin off or Various - Short Term.

[erchess]

Just to Clarify

My question concerns the $18 received instead of fractional shares when Murant Corp spun off two other corps in 06. I had forgotten that the date can be "Various" and that I can over ride in any old software to make it Short or Long term as needed.

I am getting the message from both posters that the fact that Murant is a spin-off of Southern instead of something Dad purchased, inherited, got as a gift, or found in a train station is irrelevant.

However they seem to disagree on whether i can call the sale of fractional shares a long term sale. I'd like more opinions please.

[Snaggletooth]

Long-Term

I believe this to be clearly long-term. Your dad never bought Murrain, or whatever it is.
His original investment was in Southern company, but my best guess is that he elected the reinvestment of dividends, right? I believe the stock in the "new" companies is not new investment and should bear the date of the original purchase if they were tax free (and they should have been).

Reinvested taxable dividends is something else. Technically, all of the dividends reinvested within the last twelve months is short-term, as this was an election to invest at that time such dividends which had already been taxed. If someone has purchased public utility stock, I never go to the trouble to split out the tiny portion that represents shares reinvested within 12 months, but I believe this is the technically correct thing to do.