I’ve sold stock but don’t know the original purchase price of the shares. How could I report the cost basis for the transaction?
If you know a share’s sale price but not its purchase price, here are four options for how to report the cost basis of the transaction.
- If the share was issued by a publicly traded company (U.S. or foreign), look up the historical rate for the shares online and report the share price at the time when you purchased the shares.
- If the share was sold by a private company, contact the company to request the historical price of the share.
- If options 1 and 2 are not feasible (the share was issued by a company that has since changed ownership or name, or you are just unable to find the historical rate), then report a cost basis of zero for the sale.
- If options 1 and 2 are not feasible and you are not willing to report a cost basis of zero, then you will pay a long-term capital gains tax of 10% to 20% (depending on your tax bracket) on the entire sale amount. Alternatively, you can estimate the initial price of the share. However, you should be prepared to explain to the IRS (if asked) how you came up with this price.