Ask Terry Questions Stock historic cost basis

Stock historic cost basis

By Terry Savage on February 15, 2020 | Investments

Hi Terry, My wife purchased a few shares of stock many years ago. The stock has done very well and has split and also has spun off 2 additional stocks. Is there any way to liquidate and not pay a huge amount of tax. Also is the Capital Gains tax the only tax that would be due. Does it raise our income tax bracket. Thank You

Terry Says

Yes, the capital gains tax (currently at its lowest levels) would be paid on any gains.
Long-term capital gains are taxed at the rate of 0%, 15% or 20% depending on your taxable income and marital status. For single filers, you can benefit from the zero percent capital gains rate if you have an income below $40,000 in 2020.

Find out your cost basis by contacting the transfer agent on the back of the stock certificate. They should keep historical records of prices on the date of the stock certificate. And they also should be able to tell you your cost basis of any spinoffs (other shares of additional companies that were given to existing shareholders.) This is a painful process of tracking down historical stock prices. It’s ok to “guestimate” if you find a chart of the price range on any given date.

If you know the dates (because they are on your certificates) you can use the tools at Investopedia.



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