question about cost basic of dividend stock

I'm doing my own taxes for the second time now, using TaxCut. I understand most of it (I think), but I'm lost on one issue and hoped someone could give me a hand. It has to due with stock purchase/sales. I have some stock my wife bought early in 2004 and sold, at a loss, late in 2004. So far, I understand how to deal with it (cost basis at purchase, sale price). Here's where I get lost: The stock generated dividends during the year. These automatically were used to purchase more shares (actually, fractions of shares). So, where we go to sell it all, there's more shares than we started with. I don't have a clue how to enter these fractional share or what their cost basis would be to calculate the loss. Many thanks in adavance!

David

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Reply to
unfrostedpoptart
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You seem to have sold all the shares at the same time, so you report the entire sale as a single transaction. In the description show the total number of shares that you sold. The number of shares you started with doesn't matter. The basis is the amount your wife paid for the original purchase, plus the dollar amounts of the dividends that were used to purchase additional shares.

Reply to
Bob Sandler

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