Capital Gains Tax on Foreign Stock

#2 07-12-2003, 08:04 AM

He might get help with the second question via an
inquiry to:

http://www.nni.nikkei.co.jp/

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#1 07-12-2003, 08:01 AM

Abraham W. Siff wrote:

- quote -

> My brother-in-law bought some Japanese stocks in Japan
> during the Korean War. He just cashed in the stock and
> $170,000 was deposited in his US bank account. He wants
> to know if he has to pay a capital gains tax.

Yes, he has to pay tax on the gain. U.S. citizens pay tax
on worldwide income.

- quote -

> If so, there is a second question: how does he calculate
> his gain since he has few if any records of the cost basis?

Under the Cohen rule, your brother-in-law would generally
be able to reasonably estimate his cost basis. Generally
that estimate is supposed to be conservative since it is
the taxpayer's "fault" there are no records, but the court
would likely agree there is some basis.

I presume some sort of historical record of the stock price
should exist and, in many cases, the company's shareholder
relations people can help you discover the old price *OR*
your broker can do similar research (if you used a super-cheap
discount broker, you may have just discovered one of the
disadvantages of doing so <grin> ).

--
Ed Zollars, CPA
Phoenix, Arizona

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07-12-2003, 07:59 AM

"Abraham W. Siff" <awsiff[at]juno.com> writes:

- quote -

> My brother-in-law bought some Japanese stocks in Japan
> during the Korean War. He just cashed in the stock and
> $170,000 was deposited in his US bank account. He wants
> to know if he has to pay a capital gains tax.

YES

- quote -

> If so, there is a second question: how does he calculate
> his gain since he has few if any records of the cost basis?

If he finds no way to support basis, the entire amount is
taxed as gain.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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#-1 07-11-2003, 11:16 AM

My brother-in-law bought some Japanese stocks in Japan
during the Korean War. He just cashed in the stock and
$170,000 was deposited in his US bank account. He wants
to know if he has to pay a capital gains tax.

If so, there is a second question: how does he calculate
his gain since he has few if any records of the cost basis?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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