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emc011075, Tax adviser
Category: Tax
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Experience:  IRS licensed Enrolled Agent and tax instructor
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I sold stock which originated as att was obtained

Customer Question

i sold stock which originated as att was obtained as part of an accident settlemeent in late 1963. it was divided in the stock divestiture in 1984. I can find no record of the original number of and date of purchase of the originating att stock. How do calculate capatal gains to be payed.
Submitted: 2 years ago.
Category: Tax
Expert:  emc011075 replied 2 years ago.
Hi. My name is ***** ***** I will be happy to help you.
The stock went through several splits and mergers but ATT website has a useful calculator that can be used.
At the beginning of December 1963 the original ATT stock was traded for about $140 per share. You can find the historical data here:
Now, using the information you can calculate current cost basis of the share you sold here:
You will enter the original cost - $140 on the top of the worksheet and click the appropriate split event, in your case it will be the second from the top: "if you acquired your AT&T Corp. shares after April 24, 1959 (AT&T Corp. 3-for-1 stock–split distribution date) and on or before May 28, 1964 (AT&T Corp. 2-for-1 stock–split distribution date).
This will calculate your stock basis after every additional split and reverse split. Based on $140 per share in 1963, your current cost basis is $16.99 per share. Multiply this by number of share you sold and you get your cost basis to calculate your capital gains.
Your broker statement should tell you how many shares you sold and how much per share.
Let me know if you need help with Schedule D.