I sold about $10K in stock this year from an old stock purchase plan from 3 employers ago…that employer was subsequently bought out by a big bank in a complicated stock swap deal with some cash to sweeten the pot.
Anyway, the stock was purchased over about 6 years at various prices then it tanked and the company was bought for about 20% of what I paid over the years…give or take.
I have have a trade confirmation from E-Trade for the $10 K sale, and a 1099 that notes no taxes were withheld.
How in the hell do I calculate what I owe if anything???
Unfortunately, you probably have to go back and find a couple of things. First would be to figure out your original cost basis for the original stock. Then, there is probably some information on the big bank who bought them out’s website (check investor relations tab) that describes the acquisition transaction and how to allocate your original basis to the new stock received. From what you described, it sound most likely you will have a pretty big capital loss on the transaction that you can use to offset other gains or deduct at $3,000 a year until it’s used up. If you can’t find anything on the big bank’s website, I’d give them a call and I’m sure someone can fax/email you some information to help you calculate your basis.
I sold a lot of stock last year, much of it purchased as longer term, yadda yadda, anyway, I ended up buying Turbo Tax Premier for like $35 and doing my taxes that way (I had always done them by hand), it walked me through all the crap about the stock sales, splits, etc.
You may need to guess at your purchase dates, but this at least gives you some info on the stock prices at various times during your purchase period if you can’t get the info from the company. These websites will at least allow you to make an educated guess.
I agree with peter286. I have used TaxCut (very similar to Turbotax) and it pretty much walks you through it. If you have questions they link you to the various help websites and IRS documents.
With the stocks that I have sold, the hardest part was determining the basis.
Turbo Tax actually connected to the internet and looked up the stock prices and determined the average purchase price for me…
Those 2 progeams are pretty comparable. I have used TaxCut for 9 or 10 years with a lot of success. No problem. I used to do the taxes by hand, back when they were really simple. Then I went to a CPA one year (because I thought they were getting more complicated with pension roll-overs and house sellings etc.) and was pretty disenchanted. My information is still pretty basic, compared to some, and these tax programs walk you right through it. I find the most stressful aspect to doing the taxes is assembling the information, which I would still have to do if I were going to a CPA.
Interestingly, some of the guys I work with use a CPA (they all use the same guy). He always writes them up for a food deduction on their taxes as meal expenses. I know where they are getting it from, and I can see how it works, but when I dug into it through TaxCut, their interpretation of it is that fire fighters do not get to use the meal expense deduction in most cases. So I don’t use it. But the program linked me right to the IRS page that explains it. I find it hard to read, but informative.
Did you sell all of the stock you owned in this company? If so, I wouldn’t worry too much about trying to figure out how many shares you bought each month (or however often you were buying stock). Just go back and try to figure out how much in total you put into the stock. $50/month for 6 years = $3600. Use that as your basis and move on.
If you got some cash when the “big bank” bought out the company, you should have reported a partial sale at that time. I assume you did not, because then you’d have already gathered this information.