Maven wrote:
- quote -

I think you're right and I think that was the intent of the
donor as well -- that each recipient gets an equal number of
shares AND an equal cost basis as well.

Thanks,
webunit

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

wpbrown[at]longwood.edu wrote:
- quote -

Yes that might have worked although the IRS might want to
see written confirmation from the service company that those
specific shares were transferred to each recipient (might be
tough to get). In any case, I like the idea of having the
donor specify up-front who's getting which shares. Too bad
that wasn't done in my case.

Thanks for your reply,
webunit

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

Thanks for your response. I agree it certainly would have
made things simpler if the donor had done something like
this at the time of the gift. (Hindsight is 20-20).

webunit

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

If you still know the original block amounts, why not take
the position that each person got 1/2 of each block along
with 1/2 of the corresponding shares that accreted onto each
block? Since the gift was 50/50, this seems like a
reasonable solution.

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

"webunit" <saverijv[at]apci.com> wrote:

- quote -

How did they "become" 500 shares? You mean through stock
splits? If you keep good records sure you can identify
which shares came from which of the 3 lots.

- quote -

Keep good records.

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

webunit wrote:

- quote -

Yes it is technically impossible, but why worry? Each
recipient takes as THEIR basis one half of your basis in the
total amount of shares that you gave. No way is the IRS
going to go back and question which half was transferred
first.

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

webunit wrote:

- quote -

They each get half of the original 70, 20 and 10 cost basis
reallocated to the 350, 100, and 50 shares received.

Let's change the scenario and say one first gifts 250 shares
to A and 6 months later gifts the remaining 250 shares to B.
FIFO would be used. A's basis would derive from those first
70 shares that were bought.

--
Alan
http://taxtopics.net

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

- quote -

It was the responsibility of the prior owner to establish
the basis of his gift to others. Don't blame the transfer
agent. You can establish a logical basis by adding your
cost of the three lots and dividing by 2 for each giftee;s
basis and advise them in werting what their basis is.. I
know this is not the legal way to do it, but in the end run
it won't make any difference when all the shares are sold or
inherited,.

ed

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

webunit wrote:

- quote -

Yes, have the donor (someone) determine which shares are
being given to each donee (A and B). Then have the donor
tell the broker (Equiserv) which shares are to be given to
each donee. Then have the donor tell the donees which shares
each received.

Regards,
Bill

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

I believe that there are some situations where specific
identification of stock lots is not possible, nor is FIFO
practical (and perhaps not even possible).

Here's a simplified example. Someone purchased three lots
of a company stock at various times, say, 70 shares, 20
shares and 10 shares and receives a certificate for each
lot. Each lot was bought at a different price and at a
different time. As time goes on, these 100 shares
eventually become 500 shares held in book entry form by an
stockholder services entity like EquiServ. (The
certificates have been turned in at some time past).

Now, the owner of the 500 shares decides to transfer (gift)
the shares to two people (Person A and Person B). They each
receive 250 shares transferred by the stockholder services
company on the same day (probably within a minute of each
other).

Question: Which shares did Person A receive and which did
Person B receive? They will need this information when they
sell their shares.

I believe there is no possible hope of specifically
identifying which shares each person received. No
stockholder service company maintains information on the
history of specific book-entry shares. Nor can one really
use FIFO especially if both Persons A and B sell their
shares at the same time.

Does anyone have a solution?

Thanks,
webunit

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