Stock Cost Basis

This information that is known as the stock cost basis is required by the United States Internal Revenue Service to determine the amount of tax that is owed on your stock options. This information is used to determine how much income you made or lost from the sale of your stock. The stock cost basis might be difficult or easy to figure depending upon the changes that have happened to the companies whose stock you own. If the stock was purchased by you, then the stock cost basis is the amount of money you spent to buy the stocks. If you don't remember what you paid for your stocks, you can ask your stockbroker you should have that information available. Any reputable brokerage firm will keep records for six to eight years. You can contact your broker to see how much you paid for the stock or your stock cost basis so you can determine your tax basis for the Internal Revenue Service. However if you bought your stocks before this time period of six to eight years, then you must actively try to discover what the stock cost basis was that you paid. Suggestions to help you discover your stock cost basis include the use of old stock certificates that you might still have in your possession. Also if you have had these stocks for a lot of years, you must have had to declare them on a tax form before, so you can check old income tax filings that you completed. If the stock has been received by you due to a relative's death in the family, then the stock cost basis would be what the stock price was at the time of the person's death. You can find this information by contacting the stockbroker of the relative or by using the financial section of the local newspaper's archives for a list of stock quotes. If you were given the stock, then calculating your stock cost basis would then depend on the market value of the stock when it was given to you. You would then determine your tax basis depending if you had a loss or gain when you resell the stock.

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