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Stock Cost Basis

I purchased one share of stock from OneShare.com as a novelty. I was issued an actual stock certificate. I will probably never sell it but I would just like to know the answer to the following since I like trivia. The stock is DreamWorks Animation. The charge was $27 for the stock (which was pretty close to the actual price), $39 transfer fee, and $7.99 shipping. I had a discount code for free shipping but what they did was actually take $7.99 off the transfer fee. Stock $27 Transfer fee $31.01 Shipping $7.99 Total $66

I received a W-9 from the transfer agent and returned it. I never received anything from a stock broker. I assume that OneShare.com buys large lots of stock and then just has single shares transferred as needed. My question is what is my cost basis? If I ever did sell it how much would the gain have to be before it has to be reported? If I receive dividends, at what point does it have to be reported? Be sure to see Shrek 3 when it comes out so I can make some money.

-- Dennis

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Reply to
Dennis Marks
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My first wife adamantly insisted on possession of the stock certificate. It was a family tradition for her. I dismissed it, but tolerated it, as a subculture paranoia. Then a major brokerage firm had its doors padlocked.

The Stock and the transfer fee (which I suspect is really the commission and internal costs) go into the basis. Shipping a piece of paper should not cost $7.99, but you paid it as part of the purchase and I would put it in the basis - others may disagree. But it is diminimus.

You have no deduction in the current year. You will pay taxes on the dividends, if any, as you receive them or are credited with them, i.e., a DRIP. Divendends reinvested via a DRIP increase basis because you paid taxes on them in the appropriate taxt year.

Someone buy one share of stock at 2.44 times its value is not in this for the money. My suggestion is do not sell it until it gets to $300 because the selling costs are going to be outrageous.

Dick

Reply to
Dick Adams
[original poster buys single share of stock and has certificate sent to him]

[snip]

First question -- does DreamWorks even exist as a separate company anymore? :) Didn't Paramount or Sony gobble it up?

That's an interesting question. The naive (but still quite possibly correct) answer is $66. Does OneShare require you to take the physical certificate, or could you have left it on deposit with OneShare and saved the $39 of transfer and shipping fees?

You have to report the sale regardless of what your gain or loss is. You report it on Sched D and (also on Sched D) compute your gain or loss on the sale.

Right from the very beginning. There's *no* "I don't have to report dividends until I get back what I paid for the stock" rule.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

Reply to
Rich Carreiro

It looks like $66.

The sale must be reported, the amount of gain affects the amount of tax you owe, but not the requirement to report. (If your total income is low enough you might not have to file at all.)

If you have to file, all dividends have to be reported. Seth

Reply to
Seth Breidbart

Why would anyone buy from them *except* to get the physical certificate? For instance, many people buy Disney stock because their stock certificates are a work of art, suitable for framing. If he didn't want the certificate, he presumably could have bought the stock through a normal broker and avoided those outrageous fees.

-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA

*** PLEASE don't copy me on replies, I'll read them in the group ***
Reply to
Barry Margolin

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