Cost bases of stock?
Answer:
For a gift, the giver's basis becomes your basis. If you can not determine it, it is $0.00. Using Yahoo! Finance or other stock pages you should be able to make a "conservative" estimate of its cost if you know the timeframe of the purchase.
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The day the stock is given to you, the price on that date is your cost basis.
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If the below article doesn't make sense and the sale is for a large amount, you should probably use a professional in the year you sell the stock. If it's not for a large amount, you can just use $0 as the basis and report the whole thing as income. I wouldn't do that though, but it's an option.
From the IRS website:
10.1 Capital Gains, Losses/Sale of Home: Property (Basis, Sale of Home, etc.)
What is the basis of property received as a gift?
To figure the basis of property you get as a gift, you must know its adjusted basis to the donor just before it was given to you. You also must know its fair market value (FMV) at the time it was given to you. If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis, plus or minus any required adjustments to basis while you held the property. Your basis for figuring a loss is the FMV of the property when you received the gift, plus or minus any required adjustments to basis while you held the property. See Adjusted Basis in Publication 551, Basis of Assets.
If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and get a gain, you have neither a gain nor loss on the sale or disposition of the property.
If the FMV is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Also, for figuring gain or loss, you must increase or decrease your basis by any required adjustments to basis while you held the property. See Adjusted Basis in Publication 551, Basis of Assets.
If you received a gift before 1977, increase your basis in the gift (the donor's adjusted basis) by any gift tax paid on it. However, do not increase your basis above the FMV of the gift at the time it was given to you.
If you received a gift after 1976, increase your basis by the part of the gift tax paid on it that is due to the net increase in value of the gift. Figure the increase to basis by multiplying the gift tax paid by the following fraction. The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift.
The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. The amount of the gift is its value for gift tax purposes, after reduction by any annual exclusion and any marital or charitable deduction that applies to the gift. For more information on the gift tax, please see Publication 950, Introduction to Estate and Gift Taxes.
For additional information on this subject see Gifts.
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