Author Topic: Capital Gains on Long-Held DRIP Stocks  (Read 2234 times)

TheThirstyStag

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Capital Gains on Long-Held DRIP Stocks
« on: January 06, 2015, 06:14:28 PM »
I'm considering selling individual stocks that I've held with 2 companies in DRIP plans since the 90s (which have actually performed damned well over the last 20 years).  I think I want to move this money into a nice index fund in a Roth bucket.  I'm worried about the inevitable challenge that I've been putting off for a while: dealing with calculating capital gains tax on this. 

Here's the deal:  A family member set this up for me in the 90's as a set it and forget it way to deal with a small amount of savings I had when I was a kid.  Since day 1 I have touched nothing, allowing the DRIP program to work.  At the time, I was fairly ignorant and didn't keep good records, so I have absolutely no documentation prior to 2005 (thankfully, at least one of the companies gives me electronic access 10 years prior).   As I understand it, I will have to calculate a cost basis to figure out capital gains, but everywhere I've looked for information basically says if you don't keep good records you're screwed. 

Does anyone have experience with this?  Is there any way to use estimated figures in a manner that jives well with the IRS?

Thanks in advance.

MDM

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Re: Capital Gains on Long-Held DRIP Stocks
« Reply #1 on: January 06, 2015, 06:35:24 PM »
It will take a little effort, but perhaps not too much.

The easiest thing to try is to call the company directly, ask for investor relations, then ask if they can send you a record of the dividend amount and stock price on the dividend payment date for the period you have been reinvesting.  Also any stock splits that occurred.

Or, check the company web site under "investor" (or similar) for this information.

E.g., if ExxonMobil (XOM) was one of the stocks, you could find:

http://finance.yahoo.com/q/hp?s=XOM&a=00&b=2&c=1970&d=00&e=7&f=2015&g=v
and
http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=

Put the information into a spreadsheet that adds to the total shares you have today, and you have a defensible basis calculation.  Good luck!

TheThirstyStag

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Re: Capital Gains on Long-Held DRIP Stocks
« Reply #2 on: January 06, 2015, 06:55:25 PM »
It will take a little effort, but perhaps not too much.

The easiest thing to try is to call the company directly, ask for investor relations, then ask if they can send you a record of the dividend amount and stock price on the dividend payment date for the period you have been reinvesting.  Also any stock splits that occurred.

Or, check the company web site under "investor" (or similar) for this information.

E.g., if ExxonMobil (XOM) was one of the stocks, you could find:

http://finance.yahoo.com/q/hp?s=XOM&a=00&b=2&c=1970&d=00&e=7&f=2015&g=v
and
http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=

Put the information into a spreadsheet that adds to the total shares you have today, and you have a defensible basis calculation.  Good luck!


Very interesting.

One of the problems I have is that I do not know the exact date I purchased the original shares, nor the original amount.  I am about 90% sure of the year in which I bought them.  Even with historical data available through yahoo!, how can I account for this missing information?

Thanks again.

MDM

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Re: Capital Gains on Long-Held DRIP Stocks
« Reply #3 on: January 06, 2015, 09:01:06 PM »
One of the problems I have is that I do not know the exact date I purchased the original shares, nor the original amount.  I am about 90% sure of the year in which I bought them.  Even with historical data available through yahoo!, how can I account for this missing information?
A post from a similar bogleheads' thread took the words from beneath my fingers:
Quote
From what I've understood I agree with the people who say you can use a best guess. Though I'm no expert.
For instance, if you knew the year something was bought, I think you can average the closing prices of the first and last day of the year and use that.
If you don't even know the year, make a good guess I would say.

TheThirstyStag

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Re: Capital Gains on Long-Held DRIP Stocks
« Reply #4 on: January 07, 2015, 09:07:10 AM »
One of the problems I have is that I do not know the exact date I purchased the original shares, nor the original amount.  I am about 90% sure of the year in which I bought them.  Even with historical data available through yahoo!, how can I account for this missing information?
A post from a similar bogleheads' thread took the words from beneath my fingers:
Quote
From what I've understood I agree with the people who say you can use a best guess. Though I'm no expert.
For instance, if you knew the year something was bought, I think you can average the closing prices of the first and last day of the year and use that.
If you don't even know the year, make a good guess I would say.

This is extraordinarily helpful.  Looks like it won't be as difficult as I thought.

Thank you so much.