Calculating Basis after 10 years

S

sacramento343

Hi, this is more investing related, but I thought I would give it a shot here.
I sold some stock and mutual funds in 2006 that I have owned for over 10 years. The original purchase price and basis were not on the account, and the reps for the brokerage only have data going back 10 years. On the 1099for 2006 they report the total proceeds for liquidating everything, but how am I supposed to determine my tax liability if I cannot calculate my gains because I have no idea what the original basis was? Am I missing something painfully obvious?
How will people retiring who have been putting money into their 401k for 30 years calculate their basis if there is no record for the original purchase price?

Thanks for the help. Trying to get tax stuff done before my extension date of October 15th.
 
Mostly money market stuff and some mutual funds, tickers are below. Problem is, I'm not exactly sure when the purchase date for these were either, otherwise I could just look them up. I'm very surprised there is no record of the purchase of these securities (at least none I can easily find)...



TD WATERHOUSE MONEY MARKET
PORTFOLIO (SWEEP)

CMFMZ


MUTUAL FUNDS
FRANKLIN UNIVERSAL TRUST-SBI
TEMPLETON GLOBAL INCOME FUND
ZWEIG TOTAL RETURN FUND INC
TOTAL - MUTUAL FUNDS

FT
GIM
ZTR
 
I would bring up the monthly chart for each symbol and take the approximate price. Or you can ask your broker for approximate price for each holding.
 
I did call the broker and unfortunately they do not not have records of the purchasing transactions anymore. They only have records until 1997, and I'm not sure, but I think the securities may have been purchased before then. Assuming there is no record at all, I suppose I could guesstimate on my taxes and no one would be the wiser.

However, this seems kind of ludicrous to me, since there are trillions of dollars in 401k money that will become realized gains soon, and I doubt the IRS will leave it up to people who have been filling up their 401ks for the last 30 years to guesstimate their basis.

Any thoughts?
 
Quote from sacramento343:

However, this seems kind of ludicrous to me, since there are trillions of dollars in 401k money that will become realized gains soon, and I doubt the IRS will leave it up to people who have been filling up their 401ks for the last 30 years to guesstimate their basis.

Any thoughts?
More...

Any pre-tax 401k (or IRA) shouldn't matter what the cost basis is should it? It's my understanding that it will all get taxed at your current tax rate anyway so it doesn't really matter. But I could be wrong, it's going to be another 30 years before I have to worry about that.

Norman
 
I could call the funds, and get historical pricing, but I don't know *WHEN* they were purchased. I suppose I could estimate to within the year, or two, but nothing exact. Isn't it normal for brokerages to hold securities in "street name" or whatever its called, so the fund themselves won't have my name on file, only TD Waterhouse for the purchases? I'm sure lots of TD Waterhouse clients purchased and sold those funds in those years. Any other suggestions appreciated. Thanks.
 
Quote from sacramento343:

I could call the funds, and get historical pricing, but I don't know *WHEN* they were purchased. I suppose I could estimate to within the year, or two, but nothing exact. Isn't it normal for brokerages to hold securities in "street name" or whatever its called, so the fund themselves won't have my name on file, only TD Waterhouse for the purchases? I'm sure lots of TD Waterhouse clients purchased and sold those funds in those years. Any other suggestions appreciated. Thanks.
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(Not legal advice, personal opinion, not that of Bright Trading or any of it's affiliates).

I would think getting close to the purchase date, taking an average price for the 3-6 month period (don't try to hi-ball them), and file the returns. If you happen to get audited, show them the procedures you went through, and if the IRS can come up with better or different numbers, then simply pay the difference if need be.

Don
 
Re 401K and traditional tax deferred IRA. Since every thing that goes in is tax deferred, i.e., you haven't paid tax on it yet, it is my understanding that whenever you take money out of these accounts it all gets taxed as regular income, even your long term capital gains, at your current rate. Therefore in those kinds of accounts you should not need to know the basis. I hope i'm right about this. I realize that the problem being spoken of here relates to regular brokerage accounts. I think if i was in that boat, i'd do what Don suggested.
 
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