question about schedule D column (e)

Dec 19, 2007 1 Replies
K

Dear All,



I bought $2000 Stock A and $1000 Stock B in 2004. Below are the dividends I got so far:



------------------------------------- Stock A Stock B



2004 $100 $40
2005 $100 $42
2006 $110 $44
2007 $110 $44

------------------------------------ I have paid taxes for dividends for the years from



2004 to 2006 already. I sold the two stocks and got $4000 and $800 back in 2007. What are the numbers I should fill in the column (e) "Cost and other basis" on Schedule D for the two stocks? What else I shall be aware of when filing my 2007 federal tax return?

Thank you,


-Kevin


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P

What did you do with the dividends? IOW, did you take the dividends in cash or did you take them in additional shares? If the former they're irrelevant. If the latter, you add them to basis and separate the sales into short-term (1 year or less) and long-term.

You also add your purchase commissions to basis. When you get your 1099-B's showing the sales it will tell you whether the amount is gross or net of sales commissions. If it's gross, add the sales commission and SEC fee to basis.

That's everything. See IRS Publications 550 and 551 and the instructions for Schedule D.

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