Congratulations! And condolences.
Just two days ago I answered a related question here (see: Corp.
acquisition recording transactions question.) about AT&T's acquisition of
BellSouth. In the process, I found this web page, which should lead you to
what you need:
Click the button under Cost Basis Worksheets for AT&T Corp. shares.
Oh, that it were really that simple! Since your certificate predates the
1984 breakup, you probably should start on this page:
Note the subtle but very significant difference between "AT&T Inc." and
"AT&T Corp." "Corp." was the 100+ year old company that went through the
divestiture in 1984, then survived until 2005. "Inc." is the new name for
the former Southwestern Bell Corporation (SBC), which was spun off from
Corp. in 1984, but then bought Corp. in 2005 and changed its own name from
SBC to AT&T Inc. The "Corp." name disappeared in the 2005 transaction - but
that was the company whose share certificate you now hold.
Your problem involves calculating the current basis of the AT&T Inc. shares
represented by that certificate, of course. But you also must determine
what happened to the shares of Ameritech, BellSouth, NYNEX, SBC, etc., that
should have been received in 1984! None of those shares have been sold,
obviously. Your one certificate now represents shares in all those former
subsidiaries. But it gets worse, because each of those companies went
through splits, spin-offs and mergers during the 23 years after 1/1/84. For
example, your certificate represents ownership of some number of shares of
Lucent, NCR, Comcast and many other corporations. The "basis" of each of
those shares relates back to the basis in that original AT&T Corp.
certificate, and the basis of that certificate today must be reduced by each
of the spun-off securities.
If that certificate is for a million shares, you can afford to hire a pro to
do all this. If it is for just one 1966 share, it probably is worth a lot
today, but not enough to pay a pro, so you'll have to do it all yourself.
But the same steps are required for one share as for a million. Maybe the
accumulated dividends (including proceeds from sales of fractional shares)
will make it worthwhile!
The good news is that there were millions of AT&T shareholders, and many of
them were "widows and orphans" who had tucked away their shares and forgot
about them. Old certificates still turn up fairly often, I suspect, and
there probably are pros who make a career of helping people like yourself
who get stuck with the problem. Ask your broker (not the young kid who went
to work there last year, but the grey-haired old guy who has been there
forever and is about to retire). Don't ask him to figure it out; just ask
whom you should contact. I'm sure that AT&T itself has a crew that works
full-time on these problems. That is the crew that works behind that web
If this share is part of the estate of a deceased person, your job may be
cut in half. Inherited shares usually get a new tax basis and holding
period based on their fair market value at the date of death of the owner.
So you don't have to track down the original basis and do all the math to
apportion it to today's holdings. But you do still need to gather up all
the shares and fractional shares that should have been received over the
years and value those at date of death. Then, if the death was not very
recent, you will need to track developments since the death.
Good luck, Hank. And please let us know what you find out!
R. C. White, CPA
San Marcos, TX
Click to see the full signature.