What will I need to do to prove to IRS on my filing that I actually paid the $15k amount?
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Hopefully there is a way to claim it? Thx.
Well, first you need to sell the stock. Until then, nothing to report on your return (unless the shares are deemed worthless, which doesn't even usually happen, even in bankruptcy).
Once you sell the stock, Scwhab will send you a 1099-B in late January / early February that will show the sale. That 1099-B will show (a) the correct cost basis, (b) an incorrect cost basis, or (c) an unknown cost basis.
If it's correct, just transfer the numbers to your Form 8949 and Schedule D.
If it's incorrect, report the numbers on your Form 8949 and Schedule D, and use an adjustment code to adjust the cost basis to what is correct. I'm fairly certain that the adjustment code would be "B" and the adjustment amount would be a positive number equal to the difference between the correct basis and the reported basis ($14K based on the numbers you gave), but you can tell if it's right by looking at the resulting Schedule D (assuming you're using tax software). The adjustment stuff goes in columns (f) and (g) on the 8949.
It's ideal to have all the necessary records and be perfect to the penny, but the IRS allows taxpayers who have fallen short of the ideal (we all do sometimes) to make reasonable estimates and reconstruct as best they can.
If it's unknown, you'll still report the sale and put in whatever you reconstruct the basis to be, similar to the previous paragraph.
The IRS will also always allow a basis of zero, but that will obviously result in you overpaying your taxes. Take a reasonable approach, and make notes as to how you came up with your numbers, and collect whatever partial records you may have.
Most likely, the IRS will accept your return and not ask you any questions or audit you. If they do audit you, you just go in and say "best effort, tried to be reasonable" and the IRS agent may very well go along with how you handled it.
