Determining Cost Basis For Old Stock. If you know a share’s sale price but not its purchase price, here are four options for how to report the cost basis of the transaction. Make sure you keep a record of your calculation in case the irs wants to know how you came up with the cost basis.
In this case, the cost basis is “stepped up” to $50, essentially extinguishing the $40 per share gain. Average the two prices, then multiply the total by the number of shares sold. For instance, if you sold stock for $1,000, had no cost basis and your capital gains tax rate was 15 percent, your tax would only be $150.