Need Amateur Accountant Advice

[bicker]

I inherited some stock from my mother last year, specifically LMDIA. On November 20, something happened (which gives you some idea how much I know about how stock transactions work), and then a week later I had some shares of LINTA, LCAPA, LSTZA, and DTV, instead. The concern I have is with regard to cost basis. LSTZA and DTV came in to my Quicken file with $0 cost basis. Does that sound right? If not (which is what I suspect), then how would I correct the data I have to make it right? Do I just set the cost basis as the value of the shares on the day of the transaction? (But wouldn't that ignore the cost basis associated with the original stock that this stock was spun off from?)

I'm not selling; I'm not buying; all I'm doing is record-keeping; so it isn't worth it to me to pay someone for this advice.

 

[Cheshire Figment]

You have a basis for the LMDIA which was the value as of the date of death. That is a known amount, both per-share and total.

On a certain date either LMDIA ceased to exist and became LINTA, LCAPA, LSTZA, and DTV or it remains and spun off the four subsidiaries. I would suggest determining the closing prices of all four (or five) stocks as soon as the transaction took place. Then compute the total value of each based on the number of shares and set up a ratio of the total value of the four (or five) stocks.

Apply that ratio to the basis of the LMDIA sock, and that will give you the basis of all four (or five) of the stocks individually. Basically you have no gain on the ttransaction and you now have a basis for each of the stocks, and the total basis of all of them is equal to the basis you had for the LMDIA stock.

(And I'm not an "amateur" Accountant)

Mike (CPA Retired)

 

[bicker]

Thanks! I'll paste this to my wife and maybe together we can figure out how to make it happen.