So, husband bought some sprint stock way back in 1990s with his brokeage account at etrade. Fast forward 20 yrs, we have moved over to scottrade. Scottrade trade didn't port over all our innitial purchase price on those stocks, which I have to mannually input in the incoming position section on my account.
I realized sprint recently had a merger event, in which some of our sprint stocks were sold. However, Scottrade recorded the sales proceeds whole as net proceed. We should have incurred a big chunk of long term loss on this one. Not sure why it is not accounted for. Is it because this is a merger event? I can centainly use some of the long term loss, as we have incurred some long term gain so far this year.
thx!
how to deal with this long term loss
Re: how to deal with this long term loss
Brokers don't account for capital gains and losses for investments purchased before certain very recent dates. They might fill out a made-up report, which you are seeing, but it doesn't mean anything.
What you want is to reconstruct the original purchase prices which you will be responsible for reporting on your tax return whenever you have a sale of that asset.
What you want is to reconstruct the original purchase prices which you will be responsible for reporting on your tax return whenever you have a sale of that asset.
Re: how to deal with this long term loss
You need to find something that explains the taxable consequences of the merger (which probably was sent w/ materials to vote on the merger):
e.g. http://www.iclub.com/faq/index.php?acti ... artlang=en
which contains:
If you Chose to sell your Sprint/Nextel Shares:
For those choosing the all cash option the result of this merger is a cash plus stock reorganization. First, if you have made any entries for this transaction in the Club Accounting software, you should delete them.
To record this merger will require some calculations and multiple entries in the accounting software. The basic outline of these items is given below:
Calculate the gain realized on a block by block basis
Write down the capital gains, both long-term (LTCG) and short-term (STCG).
Enter capital gain distributions for the LTCG and STCG.
Enter a smaller Return of capital for the remainder of the cash received.
Enter the actual merger transaction
The capital gain realized is limited to the actual cash received so some clubs may need to adjust the capital gain amounts before entering the capital gain distributions. A spreadsheet to assist you is available for download by clicking here, or by going to (www.iclub.com/tps/Merger with Cash Spreadsheet.xlsx) The total merger consideration is $7.1356 per Sprint Nextel share. Your capital gain will be based on this total consideration with a limit that the total capital gain cannot exceed the total cash received, excluding cash-in-lieu of fractional shares. These gains should be calculated on a block by block basis. No losses may be realized and losses on one block cannot offset gains on any other block.
The last sentence is of particular interest:
No losses may be realized and losses on one block cannot offset gains on any other block.
If this applies to you, I imagine that you could realize the losses only if you sell the rest of the stock.
e.g. http://www.iclub.com/faq/index.php?acti ... artlang=en
which contains:
If you Chose to sell your Sprint/Nextel Shares:
For those choosing the all cash option the result of this merger is a cash plus stock reorganization. First, if you have made any entries for this transaction in the Club Accounting software, you should delete them.
To record this merger will require some calculations and multiple entries in the accounting software. The basic outline of these items is given below:
Calculate the gain realized on a block by block basis
Write down the capital gains, both long-term (LTCG) and short-term (STCG).
Enter capital gain distributions for the LTCG and STCG.
Enter a smaller Return of capital for the remainder of the cash received.
Enter the actual merger transaction
The capital gain realized is limited to the actual cash received so some clubs may need to adjust the capital gain amounts before entering the capital gain distributions. A spreadsheet to assist you is available for download by clicking here, or by going to (www.iclub.com/tps/Merger with Cash Spreadsheet.xlsx) The total merger consideration is $7.1356 per Sprint Nextel share. Your capital gain will be based on this total consideration with a limit that the total capital gain cannot exceed the total cash received, excluding cash-in-lieu of fractional shares. These gains should be calculated on a block by block basis. No losses may be realized and losses on one block cannot offset gains on any other block.
The last sentence is of particular interest:
No losses may be realized and losses on one block cannot offset gains on any other block.
If this applies to you, I imagine that you could realize the losses only if you sell the rest of the stock.
Re: how to deal with this long term loss
Are you sure the broker is reporting capital gains to you? Net proceeds (as opposed to gross proceeds) may be simply the amount you netted after any fees/commissions w/o regards to your cost basis so might not be reporting CG at all.