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Christopher Phelps
Christopher Phelps, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2710
Experience:  CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member
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Tax Basis in AT&T

Customer Question

I have bought shares of AT&T in 5 different purchasess starting in 1959 and then held those shares over the years while investing all dividends and now need to know my cost basis in them.   How can I find it?
Submitted: 11 years ago.
Category: Tax
Expert:  Sandi Hargrove, SkyHawks replied 11 years ago.

You should have received brochures describing the spinoff percentages, stock dividends, partial share sales, etc with each change to the AT&T family of corps. This may not be an easy path to follow. I strongly suggest you try to find the issue dates of each share and do a search on the internet history or consult a competent broker to assist you.


MSN.com and AOL both have stock research tools that are a great help.

Customer: replied 11 years ago.
Reply to Sandi Hargrove, SkyHawks's Post: I have the Issue Dates, The Number of Shares Purchased and the Amount I Paid per Share for Each purchase of AT&T Shares I made over the years. I only made 5 purchases between 1959 and 1972 ( approximate dates)   and I have my cost basis for those purchases, what I want is a calculator type program where I can input my purchases, and the program will then take all dividend reinvestments, stock splits and then calculate my total cost basis.    

I know I could go back and look up each dividend payment and somehow total them all but I'm 71 soon to be 72 years old and I don't think I have enough years of life left to accomplish such a task, not even taking into account the Feds insistence that I pay my FIT some time in the foreseeable future.   

So thanks for the comment but it doesn't help me at all so I decline to pay for it.    
I do appreciate your quick response and honest effort and advice.    Jesse

























Expert:  Sandi Hargrove, SkyHawks replied 11 years ago.

Your other option is to take your original cost basis IF you have not used any of that basis for sales of spinoff shares in the past NOR will you use any of that original basis in the spinoff shares in the future(reduce the original basis by the used amount if you already did this). A statement should be included with your copy of your tax return showing this fact(EVENTUALLY heirs may need this information).


By use of this method, no research will be needed, IRS will be satisfied with the reporting and you will be able to enjoy your 71st summer.

Customer: replied 11 years ago.
I'm sorry but I think I haven't presented my problem clearly so I will try again.

I have made 5 seperate purchases of AT&T stock as follows:
6/29/1962 Purchased 25 shares, 4/3/1964 Purchased 1 share, Then on 6/1/1964 AT&T had a 2 for 1 stack split and I recieved an additional 26 shares, 6/30/1964 Purchased 50 shares( the number of shares on the certificate reflects the 2 for 1 stock split of May 28, 1964), 1/31/1967 Purchased 5 shares, 7/9/1983 Purchased 7 shares

This makes a total of 114 shares I held in certificate form .

Now over the years I have held the stock I reinvested all dividends thus purchasing more shares each quarter .No shares were ever sold and all dividends were reinvested to purchase additional shares.

Now my problem is to compute my cost basis pf all shares I now have.Is there a computer program or whatever I can use to accomplish this task?
All DRIPS and stock splits, if any must be computed.I hope this makes my question understandable.

Sorry for the confusion on my part.
Jess
Customer: replied 11 years ago.
I'm sorry but I think I haven't presented my problem clearly so I will try again.

I have made 5 seperate purchases of AT&T stock as follows:
6/29/1962 Purchased 25 shares, 4/3/1964 Purchased 1 share, Then on 6/1/1964 AT&T had a 2 for 1 stack split and I recieved an additional 26 shares, 6/30/1964 Purchased 50 shares( the number of shares on the certificate reflects the 2 for 1 stock split of May 28, 1964), 1/31/1967 Purchased 5 shares, 7/9/1983 Purchased 7 shares

This makes a total of 114 shares I hold in certificate form and I think something like 1500 shares (sorry I don't have the exact number at my fingertips at the moment) held in book entry somewhere.

Now over the years I have held the stock I reinvested all dividends thus purchasing more shares each quarter. No shares were ever sold and all dividends were reinvested to purchase additional shares.

Now my problem is to compute my cost basis of all shares I now have. Is there a computer program or something I can use to accomplish this task? Do you have something in your Tax Advisor Tools that would allow you to compute this tax basis?

All DRIPS and stock splits, if any must be computed because all those things will affect the tax basis since over all the years I paid FIT on all the dividends I receved I should be able to compute the dividends into my cost basis, I think.    

I hope this makes my question understandable.

Sorry for the confusion on my part.
Jess
Expert:  Christopher Phelps replied 11 years ago.

ATT as part of its investor relations website has automatic tax calculators that you may use to figure the cost basis per share based on your dates of purchase. The instructions for using the worksheets are located at http://www.att.com/ir/ss/tbi/calctaxbasis.html.


The actual worksheets themselves are located at http://www.att.com/ir/ss/tbi/worksheets/.


The worksheets do not figure in dividends reinvested. For each period for which you are calculating cost basis per share, you will want to add into your cost basis number the amount of dividends reinvested during that period (or your best reasonable guess). The worksheets do otherwise handle the 1983 divestiture and the subsequent spin-off's as well as all the splits.


AT&T's stock events page at http://www.att.com/ir/ss/tbi/reorgbknd.html explains in words how the tax worksheets handle the divestiture and spin-off's. This will also allow you to calculate your cost basis on all the spin-off companies.

Customer: replied 11 years ago.
Thanks Christopher, I guess I should have included in my question that I have been to the www.att.com website and the problem is just as you suggest, the worksheets donot figure in the dividends.....of which I have received hundreds...
it seems to me I would be calculating dividends till I probably whished I would have never received any or that better yet....I had taken them in cash and spent them, lol     
There must be a calculator somewhere and I can't understand the att site not having it...but it doesn't....am I the only stockholder who did the DRIP on all dividends????

But if I don't calculate the dividends in to my cost basis then I will be paying tax on them again now....

so I think I'll keep searching for a calculator to use, lol       

Thanks for your suggestions but it just doesn't help me much.    I do appreciate your time and effort to reply to my question Christopher, Jess
Expert:  Christopher Phelps replied 11 years ago.

I have actually calculated ATT (and spin-off) company basis numbers many times for clients who have sold positions. Trust me, there is no "calculator" out there that incorporates reinvested dividends.


What you can do is look up the dividend history for each calendar year and incorporate the information into the tax basis worksheets. The dividend history is at http://www.att.com/ir/cgi/divhistory.cgi.


If you do not have statements available for each calendar year that show the outstanding number of shares, what you can do is calculate the annual dividends based on the shares you knew you had. You then add that amount into your basis.


For example: start with your 1962 initial purchase and add to it the 3rd and 4th quarter 1962 dividends paid, all the 1963 dividends, the 1st and 2nd qtr 1964 dividends and the 4/64 purchase amount. Plug this number into tax basis worksheet 2 as the initial aggregate AT&T tax basis along with the number of shares and you will then get your post-split per share basis. Then repeat with each tax basis worksheet interation.


With a little organization it should not take you that long. If you want to make your calculation even more accurate, you can look at the AT&T price history by year and divide the average price into the amount of dividends paid to you to get a rough approximation of the likely shares you purchased.


Unfortunately, I know of no other way.

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