Basis of Stock

Basis of Stock

If purchased, the amount paid for the stock. If the stock is received as a gift, basis is generally the basis of the previous owner or the fair market value when received. The basis of inherited stock is usually its fair market value on the date of the decedent's death.
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The fortune is calculated on the basis of stock prices and exchange rates information available as of October 12," it added.
Years ago, recognizing the burden of calculating the basis of stock in a type B reorganization, the IRS issued Rev.
In addition, there is a per issuer limit on gains eligible for the exclusion equal to the greater of $10,000,000 or 10 times the adjusted tax basis of stock issued by the small business and disposed of by the investor during a particular year.
A shareholder's aggregated amount of losses and deductions for any taxable year can't exceed the sum of his or her adjusted basis of stock in the S corporation and any indebtedness of the corporation to the shareholder (IRC section 1366(d)).
The Internal Revenue Service has shown increasing interest in taxpayer compliance with Revenue Procedure 81-70, which provides guidance on determining the basis of stock acquired in stock purchase transactions (mainly stock swaps).
The records were invaluable in computing the cost basis of stock sold, determining her separate property and withstanding IRS audits.
If the numbers representing the dollar amount of the outside basis, the inside basis, and partnership liabilities are all equal, the tax consequences with respect to recognized gain, basis of property held by the corporation, and basis of stock held by the former partners are identical.
The IRS says Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, will be expanded in 2011 to include the cost or other basis of stock and mutual fund shares sold or exchanged during the year, and stockbrokers and mutual fund companies will use Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, to report this information at year end.
9) As amended by the Taxpayer Relief Act of 1997, section 1059(a)(2) requires immediate gain recognition whenever the basis of stock with respect to which any extraordinary dividend was received would be reduced below zero.
In one case, the IRS succeeded in distinguishing between advice on the tax consequences of a stock exchange (deductible) and determination of the basis of stock received in a reorganization (capitalized) because calculating the stock's tax basis was for the taxpayer's possible future use.
Consistent with past practices, stock options provide value to employees on the basis of stock price appreciation over the grant price.