Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.
Q: I inherited 13 shares of Exxon in June 1972. Because of stock splits, I now have certificates of: 13 shares (inherited), 26 shares (split), 72 shares (split), 104 shares (split). How do I enter the certificates on Schedule D? Do I just enter the average cost basis as of June 9, 1972, (high $71.25, low $70.625, close $70.875) as I have no record of the actual cost basis.
BA: I assume that you have sold all of the shares (original 13 plus subsequent splits) that you inherited from your mother on June 9, 1972. Your basis in what are now 215 (13 + 26 + 72 + 104) shares of Exxon stock is the average of the high and low on the date of death (or alternate valuation date) which you indicate is June 9, 1972, times the number of shares you inherited. The calculation for basis would be as follows: 13 shares x ([71.25 + 70.625]/2) or $922.19 assuming the high and low for Exxon on June 9, 1972, was $71.25 and $70.625 respectively. The difference between the proceeds you received when you sold the shares and the basis should be treated as a long-term capital gain.
Q: If I sell my house for less than I paid for it, can I take the loss as a deduction on my income tax? If so, what form do I use?
There is no tax relief for a sales loss on your principal residence.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.
Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.
To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after the greeting.
Written queries may be sent to TAX QUESTIONS, The Baltimore Sun, Business News Department, 501 N. Calvert St., Baltimore 21278. Fax questions to the Business News Department at (410) 783-2517. Callers are encouraged to leave their names and phone numbers. Names will not be published. Questions will not be answered by phone.