Re: capital gain (on sale) questions

From: Rich Carreiro <rlcarr@animato.arlington.ma.us>
Subject: Re: capital gain (on sale) questions
Date: Sat, 29 Jan 2000 21:41:51 -0500

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>1.  1099 forms - all they show is the gross amount sold.  So I have to
>    calculate the capital gains on the sale of the funds myself?

Yes.

>(how does the IRS check?)

If they audit you (or your relative) they may demand to see substantiation
for the basis figures you used.

>2.  a.  Any way to estimate, or do I need to go back and hand
>    calculate - the $150,000 portfolio had an initial investments in 3
>    funds and monthly reinvestments for over 5 years!

You need to go back and calculate it.  Reinvestments are treated
as additional purchases (which they are).

>(any ideas/way to estimate if I can't find one or more of those 60+
>statements?)

Well, assuming you never sold any before, the total basis will be
the sum of all the purchases ever made.  You know how much "out of
pocket money" went into the funds and you know by looking at old
tax returns (the 1099-DIVs from all those years) how much in dividends
and distributions were paid out, so if all dividends/distributions
were reinvested, you know how much extra went into the funds.

>        b. The $100,000 is not as difficult - earnings were paid out,
>        not reinvested, but it was bought over 10 years ago - anyone
>        know where I can get fund quotes that far back - I can
>        probably get to within one quarter of when it was originally
>        bought.

You don't need quotes.  If all dividends/distributions were taken in
cash, the basis in the fund never changed.  All you need to know is
how much money was put into it.  That'll be the basis in that fund.

>Any help appreciated, especially any guidance on estimating if the
>paperwork can't be found. :(

Just on general grounds, consider checking out http://www.fairmark.com
and read their pages on how mutual fund taxation works and on how
capital gains and losses work.

Rich Carreiro                            rlcarr@animato.arlington.ma.us

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