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Hi and welcome to Just Answer!
You likely received a form 1099-B that reports the total proceeds $800 - correct?
yes, I think its around 800
So your original basis was $4500 - thet what you paid - and you received instead - $800 cash and $450 worth of stock - correct?
yes those are approximate amounts, do you need exact amounts?
I can get those from my brokerage account
you will need exact amounts for reporting - not here..
I bought the stock in 2002 (espp)
then there was a reverse split of 25:1 leaving me with 65 stocks in 2005
then it was sold in 2010
As you received $800 in cash and $450 worth of stocks – you may assume that 64% were sold and 36% were exchanged for new shares.
Because you paid $4500 –
$4500*64% = $2880 will be allocated to the part you sold and $1620 to your new shares.
So you will report on the schedule D: sale price $800 and basis $2880 = loss $2080
The basis of your new shares will be $1620
Keep these calculations fro your record.
actually that number $450 is incorrect
I got $825.5 in cash and 16.65 shares of the new stock
what is the value of new shares?
thats the question, what price do I use to calculate value
today's price or price on day of acquisition?
On the day you got them.
when they were posted on your account.
so the fact that there was a reverse split in 2005 has no bearing on this calculation?
It will not affect the total basis. It will affect the basis of each share.
The total basis = what you paid is still the same.
If you give me the value of new shares at the time you get them - I will recalculate your basis.
so I got 16.65 shares of new stock at 26.21
and I got 825.5 in cash
I paid 4393.775 for the original stock
Ok - let me redo calculations...
As you received $825.50 in cash and 16.65 shares @ $26.21 = $436.40 worth of stocks – I will round numbers $826 and $436 – total $1262.
You may assume that 65.5% were sold and 34.5% were exchanged for new shares.
Because you paid $4394 –
$4394*65.5% = $2878 will be allocated to the part you sold and $1516 to your new shares.
So you will report on the schedule D: sale price $826 and basis $2878 = loss $2052
The basis of your new shares will be $1516
Please verify and keep these calculations for your record.
Okay, so the initial shares were bought in 2002. HOwever the exchange happenned on 1/29/2010. So the loss whenever I sell the shares with 1516 basis will calculated as long term or short term based on 2002 date or 2010 date?
Long term capital loss because shares were owned more than a year.