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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4167
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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My parents purchased 50 shares of El Paso Corporation stock

Resolved Question:

My parents purchased 50 shares of El Paso Corporation stock for me back in the 1980s. My mother does not remember how much they spent, nor do I have any forms from that time frame. The dividends were never very much. Now that Kinder Morgan Inc has acquired El Paso, I was issued some of their stock, but my 50 shares of El Paso were counted as sold, for $720. Now I've got to figure out how much was originally paid for my 50 shares of El Paso back in the 1980's. Help!
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi, was this El Paso Electric? Yicker Symbol EE?

NPVAdvisor :

sorry - "ticker" symbol EE

NPVAdvisor :

That history goes back to 1989

NPVAdvisor :

hello?

NPVAdvisor :

Can you give me the ticker symbol?

NPVAdvisor :

El Paso Pipeline Partners, L.P. (EPB) -NYSE goes back to 2007

NPVAdvisor :

and


El Paso Corporation Preferred S (EP-PC)


-NYSE

NPVAdvisor :

soes back to 2003

NPVAdvisor :

I'm guessing it was El Paso Electric

NPVAdvisor :

The El Paso Company, as it became known in the 1970s, ceased to exist as an independent corporation in 1983. The company was purchased by Burlington Northern Inc. and became a 100-percent-owned subsidiary

NPVAdvisor :

THen Burlington completed the spin-off of El Paso Natural Gas Company on June 30, 1992

Customer:

EPC is the ticker that was on my last dividends statement for 2012

NPVAdvisor :

William A. Wise was selected to act as president and chief executive of the again-independent El Paso. The 45-year-old Wise had been with El Paso since 1970, working as an attorney and then serving in various management positions. Wise was credited with helping the company make a transition to transport services during the late 1980s and with helping to make El Paso a low-cost industry leader. When El Paso regained its independence, its pipeline consisted of a 20,000 mile network connecting three oil producing regions in Texas, Oklahoma, and New Mexico to buyers primarily in California, Arizona, New Mexico, and Texas. Sales during 1993, its first full year of operation, topped $900 million, about $90 million of which was net income.

NPVAdvisor :

ok we're getting closer

NPVAdvisor :

Does it say common stock or preferred stock?

Customer:

I'm looking at a 1099-div. where would it be?

Customer:

It's got a holder account # XXXXX it that starts with the letter "C". Maybe it's just common stock? I'm not sure...

NPVAdvisor :

No, I think you have EP-C the preferred stock

NPVAdvisor :

just a sec, I think I've found something

Customer:

OK, the Co. ID says "EPC".

NPVAdvisor :

The history on this one only goes back to 1998

NPVAdvisor :

I bet there was a conversion of some sort

NPVAdvisor :

Yes, on Mar 12 1998, when typical volume for everything after was in the 100s of thousands.... the volume as 42 million

Customer:

I know I'm going to sound ditzy, but my parents bought me little chunks (50 shares) of stocks when I was young. One of them was Tenneco (which I think I unloaded in the 90s), el Paso, etc. I'm not sure if El Paso spun off of something else, or what.

NPVAdvisor :

Yes, there was probably an offer in 98 for exchanging so many share of the Old Elpaso Corp for theis new El Pasp preferred ... see this:

Customer:

Basically, my tax person has the Kinder Morgan 1099-B, which says I sold 50 shares of El Paso for $720+. Unfortunately, my taxes were already filed when this 1099-B came in. I was pissed! The Kinder Morgan people said they'd received an extension on sending out the forms. Problem is, I've got to figure out what the original El Paso was bought for, and when, so my tax person can do what they need to to amend my taxes.

NPVAdvisor :

Yeah, I just noticed that there was a big dereg in 1993 ... prpbably had something to do with the changeover to preferres shares ... see this:

NPVAdvisor :

El Paso was in a relatively strong position in its industry going into the mid-1990s. It was the largest supplier of natural gas to the state of California and had successfully changed from merchant to transporter in compliance with new (1992) federal regulations. But it was also facing obstacles. Most notably, the California gas market was becoming glutted, dampening profits in El Paso's most important region. Nevertheless, investors were enthusiastic about El Paso's chances, as evidenced by a doubling of the company's stock price between 1992 and early 1994. El Paso was pinning its long-term hopes on the rapidly expanding Mexican market, to which it had unsurpassed access. It was also engaged in an ambitious effort to vastly increase its access to the northern California natural gas market.


In October 2011, Kinder Morgan acquired El Paso Corp. in a $21.1 billion deal.

Customer:

Yes, then the CEO committed suicide, and El Paso really went downhill. Shady deals, and such.

NPVAdvisor :

So, there was probably a conversion of some sort... you could either "back into it" bu contacting the transfer agent or , as you say, get the actuall prives paid along the way

Customer:

Huh?

NPVAdvisor :

THe transfer agent for the stock can tell you all of the conversion percentages

Customer:

what's a transfer agent?

NPVAdvisor :

OR if it was jst the one purchase of this ....

NPVAdvisor :

If you call the broker, they can tell you ... that's the person (company, probably somebody like Chase) that actually does the real, physical conversions... for example ...

NPVAdvisor :

if you wan to have a certificate re-issued you (or your broker) has to ge that from the transfer agent

NPVAdvisor :

How bout your parents old tax returns

NPVAdvisor :

they can trace it back from what you have now to the original purchase

NPVAdvisor :

by the actual CUSIP number ,

Customer:

Oh. The broker my mother used died a while back. Wheat First Securities then dropped me, because my account was so small. (# XXXXX holdings.) The El Paso certificate was sent in by me when Kinder Morgan offered their options.

Customer:

I've got the original certificate number. Is that the CUSIP number?

NPVAdvisor :

It should right on the certificate

NPVAdvisor :

The original El Paso Cert?

Customer:

Like I said, the certificate was sent in, along with a bunch of papers with special stamps, etc, so kinder morgan could do their thing.

Customer:

I have no paper stock certificate for El Paso. Kinder Morgan's stuff is via Computershare.

NPVAdvisor :

Where's you Kinder Morgan helpd now?

NPVAdvisor :

sorry "held"

Customer:

Computershare.

NPVAdvisor :

ok sorry computershare

NPVAdvisor :

I would call them and ask if they can tell you who the transfer agent is ... then the transfer agent should be able to trace it back

Customer:

Computershare told me their records indicate they acquired the El Paso account in June 2003, but that's not necessarily when the stock was originally purchased.

Customer:

If the "transfer agent" was the wheat first securities broker my mom used, the agent died back in the late 1990s.

NPVAdvisor :

If we knew what original ticker symbol was... Yep 2003 is the beginning of the history

Customer:

What does that mean?

NPVAdvisor :

THere was probably an exchange for the common stock that was originally bough ... and THAT had to be sime time after 1993 ... when Burlington spun them back off

Customer:

(I think I'm really beginning to hate stocks.)

NPVAdvisor :

OK Google Finance will give you the history on almost any security ... many go back into the 30s or 40s

NPVAdvisor :

EP-C started ...in 1993

Customer:

Spin doctors. AUGH! OK, back to reality. How do I approach the "original purchase price"?

NPVAdvisor :

and as I was saying before...

Customer:

Yes, I've been looking at Google Finance tonight.

NPVAdvisor :

40 millions shares trade, so that means there was some sort of conversion .. which brought your into existence .. from what your parents bought

NPVAdvisor :

Yes, look at this real quick

Customer:

My mom is 81 years old and has the onset of Alzheimer's. my Dad died in 1988, so finding their tax records is pretty slim.

NPVAdvisor :

Wow my mom's 83 and is a little farther along than that

Customer:

I called her today to see if she, by any chance, remembered the general price range of what they spent buying it, and she did not. Just recalled buying me some little stocks...

NPVAdvisor :

I think the transfer agen is going to be the only way ... because if you give them (and there's be some nominal fee) how many shares you own of what you have ... they can trace it all the way back to x number of shares ...but the you'll still have to pid down (or estimate and hoe, ) on the schedule D

Customer:

"It's all fun, until someone gets a 1099-B filed!" Ooops. Sorry.

Customer:

How do I find the transfer agent for my shares?

NPVAdvisor :

Yep ... only in 2011 did brokerages have to start tracking basis

NPVAdvisor :

Computershare can tell you

NPVAdvisor :

call their customer service .. tell them what you're doing and they will tell you ... they will know, regardless

Customer:

So I ask them for the "transfer agent"? Why didn't the customer service agent tell me that today? (Believe me, I gave them the whole scoop as to what was going on...)

NPVAdvisor :

the transfer agent is the nexus ... many times the OLY record keeper that trace it all they way back ... they are the people that actually did the conversion

NPVAdvisor :

Not the kind of thing the everyday Joe knows about

Customer:

Is the transfer agent the stock broker?

NPVAdvisor :

OR you can call the provious broker

NPVAdvisor :

classic brokerage houses are used to dealing with that stuff

NPVAdvisor :

no the transfer agen is the one that records the actual CUSIP numbers, and when it gets exchange, splits merged into another company, etc they are the people that do that work

NPVAdvisor :

used to be done by had on wall steet

Customer:

She's dead. (Would Wheat First Securities have to keep her records?)

NPVAdvisor :

not all computerized of course

NPVAdvisor :

they don't hae t keep her records (but yuea there are some req's around keeping CERTAIN records for a number of year ... might be 10?

NPVAdvisor :

hand on ... let me try something

Customer:

So the CUSIP number was on the original certificate, but it's not the certificate number?

NPVAdvisor :

COULD be the same .. sorry but not sure....

Customer:

(The Computershare rep gave me the certificate number today

NPVAdvisor :

take a minute and look at this

Customer:

Hmm... I tried the old El Paso website today, but it just funnels you to the Kinder Morgan site.

NPVAdvisor :

thought: Kinder Morgan will have, as all do, and inestor relations number/department

NPVAdvisor :

Here we go:

NPVAdvisor :

THEY will know he transfer agent

Customer:

Yes, that's the customer service person I spoke to. I think... It was via Computershare, so maybe not.

NPVAdvisor :

bet not

NPVAdvisor :

cold be

NPVAdvisor :

nvestor Relations
(NNN) NNN-NNNNbr/> km_ir@kindermorgan.com


Shareholder Services (ComputerShare)
KMI:(NNN) NNN-NNNN
KMP:(NNN) NNN-NNNN
KMR:(NNN) NNN-NNNN
EPB:(NNN) NNN-NNNN/p>

Customer:

Yep, same number I called today... (NNN) NNN-NNNN that's the number of the rep I spoke to today.

NPVAdvisor : (NNN) NNN-NNNN/p>
NPVAdvisor :

You want invesor relations, not shareholder services

Customer:

I'll call them tomorrow, explain things, and get the transfer agent info. Gotcha. Investor relations.

Customer:

Should they be able to give me the transfer agent telephone number, contact info, and things of that sort?

NPVAdvisor :

I just typed in a Natural language search: Whpis the transfer agent for Kinder Morgan and got...

NPVAdvisor :

Kinder Morgan - Investor Information



www.kindermorgan.com/investor/

NPVAdvisor :

Yes, I think so

NPVAdvisor :

in Shareholder services you're probably getting more of a call center

Customer:

ok

NPVAdvisor :

with this were easire ... believe me I've neein is the business for 25 years and watched people pull their hair out when they get the 1099B and haven't tracked their basis

Customer:

Any other advice you can give me?

NPVAdvisor :

I had one client who constantly trade a little 29000 account and he got a bill from IRS for 477000

Customer:

(Besides buying a 5th of gin.)

NPVAdvisor :

For years all we could ever get from IRS was "It's the investor's responsibility"

NPVAdvisor :

:)

Customer:

Don't freak me out. (I think mine are small potatoes, compared to that.)

NPVAdvisor :

Single malt scotches here

NPVAdvisor :

No her just traded so much and all they say was the proceeds of sale and it you don't show them the basis they assume the basis is zero

NPVAdvisor :

that's what they changed law ... finally

NPVAdvisor :

but the way it was done it only helps those who START investing in 2011

Customer:

So if I don't dig up this info, the IRS will assume I made $720+ on the sale of the El Paso, and charge me accordingly?

NPVAdvisor :

For these kinds of question, where you just don't know the transfer agent is the botXXXXX XXXXXne, they are th link ....

NPVAdvisor :

1099 B was 720?

Customer:

$726.67

NPVAdvisor :

yep .. so if you're in the 25% bracket, for examplt ...because its added to whatever other income you have .... costs you 181 in additional tax

Customer:

I also received some Kinder Morgan Warrants with the takeover. What do they count for? Nothing until I sell them or use them myself?

Customer:

(So $181 out of what I should have gotten back this year?)

NPVAdvisor :

that's right .. a right to buy at a certain price .. and they do have a market price, but nothing until you sell them or the resultant purchased stock

NPVAdvisor :

that's right, or added to what you owe,

Customer:

I only got 21 shares of KMI, along with the warrants and $.

NPVAdvisor :

if you used torbotax or another package, you can go in and do a 1040 x amended pretty easily

Customer:

No, we use a tax place here in town. They've done our taxes for about six years now.

Customer:

NOT HRBlock

NPVAdvisor :

37.60 today KMI

NPVAdvisor :

basis might not have been much anyway

Customer:

Hmm.. tempting to unload. But wait. That'll mean another 1099-B. AAUUUUGH!

NPVAdvisor :

I mean if they bought it for $50, it's almost all gain anyway

NPVAdvisor :

No wait a minute

NPVAdvisor :

this would be capital gains NOT ordinary incomegeez sorry ... more like 15% x 726

Customer:

When I had the kinder morgan rep on the phone yesterday, they said they could sell it for me, but there were some $15 agent fees, another $15 company fee, and a 12 cent per share fee, etc. Sounded like a lot, but I have nothign to compare it to.

NPVAdvisor :

for 2012, to capital gains rate (long term) which this certainly is :) ... 15%

Customer:

About $108 I'll owe the IRS for the privilege of selling stock?

NPVAdvisor : Analyst Ratings for Kinder Morgan (KMI)
NPVAdvisor :

Overall Rating: BUY

NPVAdvisor :

Sorry ... the 1090B IS a proceeds of sale reporting

NPVAdvisor :

so the 726 is the proceeds of sale and i done in 2012 . yes 108.. for having sold the stok

Customer:

I haven't used this site before. I see a "save & exit" button. Will that save our entire chat so I can refer to it later?

NPVAdvisor :

no if you unload now it'll be a gain of essentially nothing

Customer:

Also, can I ask you more questions about this, if necessary.

NPVAdvisor :

yes,,, and actually if you just bookmark the page it stays here effectively forever

Customer:

OK. I guess that means I should hold on to my little 21 shares...

NPVAdvisor :

I can speak to that back to 2006m anyway

Customer:

??

NPVAdvisor :

Very possibly, it's certainly no a dog

Customer:

2006m?

NPVAdvisor :

meaning everythin I ever posted her has been permanent (same URL) since 2006

NPVAdvisor :

sorry for the typos ... gettin' late here (oh your in NC?)

NPVAdvisor :

Atlanta here

NPVAdvisor :

sometime I end up talking with folks in CA until VERY late

Customer:

Well, I'm getting cross eyed. WAAAAY past my bedtime. The rest of the house is asleep. Yes, NC, and I've got family in Atlanta. Small world!

Customer:

How much of the $35 do you get to keep from Just Answer tax?

NPVAdvisor :

really is . yep same here ... (family gone to bed) BUT it's getting to be a real trend right noe ... LOTS of tax questions coming out of the woodwork

NPVAdvisor :

17.50

Customer:

That stinks! Anyway, thanks for the help.

NPVAdvisor :

Not great hourly pay, I know ... but it all comes out in the wash ... sometimes I can provide a quick answer to 20 questions in and hour (certainly not the primary income stream) ):

NPVAdvisor :

Here ... let me give you my ceremonial ... sign off...

NPVAdvisor :

If this HAS given you enough information, I would appreciate either an “accept” or a feedback rating of 3 (OK) or better. That's the only way they will pay us here. HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Customer:

Try teaching. That'll really keep your income low! Haha! But at least it's fun. If you enjoy your job, it's worth it.

NPVAdvisor :

IN this area, that the part that really stinks .... no matter how nowledgable we are or how spot on the answer you have to rate well or JA keeps the money

Customer:

High rating, it is! So I just come back to this bookmarked page to ask you any more questions on this topic?

NPVAdvisor :

I'm actually finishig up a JD, and already have anough hours to teach in an AACSB business school

Customer:

JD?

NPVAdvisor :

Law Degree

NPVAdvisor :

I'm a CFP, have an MBA in tax and finnce but want to JD for both doctora level for teaching and to add to my practice

Customer:

Ahh.. Good luck to you! You've been a help to me, and I'll let you know what they say about the all great transfer agent.

NPVAdvisor :

yep that's really the only answer when you juat don't know the history of your shares

NPVAdvisor :

... appreciate

NPVAdvisor :

Name's Lane

NPVAdvisor :

To ask for me again, just go here: NPVAdvisor




And enter your question in the question box




Thanks again,


Lane

Customer:

Take care- and wish me luck! (I'm Martha.) Bye-

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4167
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.


Thanks so much for the rating Martha.

Good luck with it.

Lane

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