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filing small amount in 1099B?

My husband hold a small amount of odd shares of Verizon, which was spin-off FairPoint Communications in 2008. He received fractional shares (less than one share) of FairPoint Communications and its value is about $7. He does not have record of the cost of Verizon because it was converted from GTE. He purchased various GTE shares from his pay checks when he worked for the company 25 years ago. Again, he has not kept any record of GTE.

We received form 1099B of 2008. It is called Proceeds From Broker and Barter Exchange Transactions. The amount in box 2 is about $7 and a check box indicated gross proceeds. The description in box 7 is FairPoint Communications, Inc. Proceeds from Spin-off and Merger.

My questions are as following.

  1. Practically, do we have to report the into the federal income tax return? I heard from somewhere that it is not necessary to report if the value is less than . I am not sure if it o.k. or not. I just feel the headache paper work for these a few dollars.
  2. If we have to report it on the schedule D, how should we figure out the cost/other basis (column e) since my husband has no record at all?

Can anyone out there with the knowledge and experience give me some suggestion how to handle our problem. I really appreciate any ideas.

Thanks,

Jiang

Reply to
jiang
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"jiang" wrote .

Yes, you have to report it. Schedule D, and right or wrong many people would not compute the cost basis on this small of a fractional share, leaving the cost basis to the remaining full shares.

At worst it's $1 of tax.

Reply to
Paul Thomas, CPA

For such a small amount, figuring the cost basis is not worth the time and effort. Most commonly, a cost basis of ZERO can be used, making the entire $7 taxable. At most, that is 15% of $7, or $1.

Spend your energies and time in reconstructing the cost basis of the whole shares you retain, as you will need that when and if you sell. Or leave them to someone in your Will, and they then get the FMV as cost on your date of death.

Reply to
smithff33

You're gonna have to figure out the cost basis of your remaining Verizon and FairPoint shares anyway, in case you decide to sell them. So might as well do the research to figure this out (ie. contact the financial institution and ask them, etc). Then as a bonus you'd know the cost basis of the fractional share of FairPoint.

Reply to
removeps-groups

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