A long-ago stock price is needed to claim loss

Heir's basis is generally the value on date of original's owner's death

February 17, 2002|By Neil Downing | Neil Downing,THE PROVIDENCE JOURNAL

When my mother died Sept. 4, 1988, she left me some stock in both Bethlehem Steel and Polaroid. As you're probably aware, both these stocks have gone belly up. ...

I'm trying to find out what the prices of those stocks were on that date of Sept. 4, 1988, and if I can claim a capital loss, since I need to do that for my income tax.

Let's take the points you've raised one at a time:

Stock price: For determining how much of a profit (or loss) to report for tax purposes, you must know the "basis" of the stock.

As a general rule, your basis is whatever you paid for the stock. However, when you inherit stock, you get to claim what's known as a "stepped-up" basis.

In other words, your basis is generally the value of the stock on the date of death of the person from whom you inherited the stock.

If you have a stockbroker, he or she may be able to look up the information for you, at no charge. The investor relations department of the company whose stock you hold may also offer help.

You may also look up the price by going through the stock listings of old newspapers - public libraries often have old issues on computer or in some other format that may make the chore a bit easier.

Nellie S. Huang and Peter Finch, in their new book, The SmartMoney Stock Picker's Bible, recommend the Yahoo! Web site: www.yahoo.com.

It has stock quotes dating to 1962. The figures can be hard to find. First, go to finance.yahoo.com and use the site's tools to get a current stock price.

When that screen pops up, click on "Chart" and scroll down the page to find the "Historical Quotes" option in small print below the chart. Be sure to focus on the far-right column, which gives you the price adjusted for stock splits, they said.

Claiming a loss: Whether you may claim a loss is a tricky question. If you sell your shares through the normal means, or have your broker (or the issuing company) buy them for a nominal amount, you'll have the basis you need to calculate the amount of your loss, and may then claim the loss on your tax return.

Otherwise, simply because a business is in bankruptcy doesn't automatically mean you may claim a loss.

In other words, it may not necessarily be worthless for tax purposes. Why? Because there's always the chance that the stock may someday rebound in value - perhaps because the business gets reorganized and emerges from bankruptcy court proceedings.

If you're looking at large amounts of stock, a lot may be at stake, and you may want to consult an accountant, enrolled agent or other professional.

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