Calculating cost basis for AT&T to Warner Discovery (WBD) stock transaction from 1999

You've got a common problem with older stock holdings! For the original cost basis, you have a few good options: Look up the historical stock price for AT&T on that exact date (12/1/1999) using sites like Yahoo Finance historical data. Multiply that price by the number of shares purchased to get your basis. Just remember that AT&T has had several splits and spinoffs since 1999. For the AT&T to Warner Discovery transition, that was part of the 2022 WarnerMedia spinoff. AT&T shareholders received about 0.24 shares of WBD for each AT&T share they owned. The basis allocation was roughly 71% to AT&T and 29% to the new WBD shares. If you can't determine the original basis despite your best efforts, you might need to use zero as the basis and pay taxes on the full amount, or see if your dad's broker has any historical information when the paper certificates were deposited.

I went through exactly this nightmare with my uncle's old stock certificates last year. After trying everything else, I finally used https://taxr.ai and it actually saved me hours of headache. You just upload the 1099 and any documentation you have, and their AI analyzes everything and gives you the correct cost basis calculations including all those crazy spinoffs and splits. For old paper AT&T stock certificates especially, they have specific tools that track all those corporate actions from decades ago. It even handled the exact AT&T to Warner Discovery transition which was super confusing with all the percentage allocations. The report they generated made it super clear how much of the original basis needed to be allocated to each part.

Just wanted to follow up - I finally tried https://taxr.ai for my family's old stock situation and it was actually amazing! I was hesitant at first, but we had these ancient paper certificates from different telecom companies including some AT&T from the 90s. The service tracked every single corporate action including that weird AT&T/Warner Discovery spinoff. The report showed that for our AT&T shares purchased in 1997, after all the spinoffs, splits, and mergers, we needed to allocate 71.5% of our original basis to the remaining AT&T shares and 28.5% to the new Warner Discovery shares. It even calculated the basis for some BellSouth shares that eventually became AT&T through a merger. Saved me from a massive headache trying to piece all this together manually!

If you're still struggling with getting answers about those old AT&T shares, I'd suggest trying to get through to the IRS directly to ask about cost basis requirements for inherited or very old stocks. BUT... good luck actually reaching anyone at the IRS these days. I spent 4+ hours on hold last month. I finally used https://claimyr.com which got me through to an actual IRS agent in about 15 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c. They basically hold your place in line and call you when they reach an agent. I was super skeptical but it actually worked. The IRS agent explained that for very old securities where basis can't be determined with reasonable accuracy, there are special rules that might apply, especially with stocks that underwent multiple corporate actions like AT&T. Definitely worth the call to make sure you're calculating everything correctly.

I want to apologize for my skepticism about Claimyr. After several failed attempts to reach the IRS myself about some old stock basis issues (spent over 3 hours on hold last week), I decided to try it out of desperation. It actually worked exactly as described. They called me back in about 20 minutes when they reached an IRS representative. The agent I spoke with was extremely helpful regarding historical cost basis issues with stocks that went through corporate actions. For the AT&T to Warner Discovery situation specifically, they confirmed that using historical financial services to reconstruct the basis is acceptable documentation for audit purposes. I'm honestly shocked it worked so well. Saved me hours of frustration and I got exactly the information I needed about handling these complex stock transitions.

Another thing to check - call your dad's broker and ask if they have any "transfer statement" from when the paper certificates were deposited. When physical certificates are deposited, sometimes there's documentation created that might have the original cost basis or at least the value at the time of deposit. This could give you a starting point. Also, if your dad ever worked for AT&T (many older folks with AT&T stock were employees), check if these might have been employee stock purchase plan shares, which would have a different cost basis calculation.

Has anyone used historical newspaper archives to find stock prices? My local library provides free access to newspaper archive databases, and I was able to find the stock section from December 2, 1999 (day after the purchase date mentioned) which showed AT&T's closing price. Just another option if the online financial sites don't go back that far.

I'm dealing with a similar situation with my father-in-law's old stock certificates. One thing that helped us was checking if your dad kept any old tax returns from around 1999-2001. Sometimes people recorded the stock purchases on Schedule D even if they didn't sell that year, or there might be dividend income reported that could help verify he actually owned the shares. Also, AT&T's investor relations department has been pretty helpful when I called them directly. They can't give you the exact cost basis, but they can confirm the stock splits and corporate actions that affected shares purchased on specific dates. They told me that AT&T stock split 2-for-1 in May 2000, so if your dad bought in December 1999, that would double his share count before any of the later corporate actions. The Warner Discovery spinoff in April 2022 is definitely the trickiest part - I ended up having to allocate about 71% of the adjusted basis to the remaining AT&T shares and 29% to the new WBD shares based on the relative trading values at the time of the spinoff.

For AT&T investor relations, I found their direct shareholder services number is 1-800-348-8288. When you call, ask specifically for "historical corporate actions" or "stock split information" - that usually gets you to the right department faster than going through general customer service. Regarding old tax returns and Schedule D - stock purchases that weren't sold typically wouldn't appear on Schedule D unless there were dividends involved. But if your dad received dividends from those AT&T shares, they would show up on Schedule B (Interest and Dividend Income) with AT&T listed as the payor. This could help confirm he owned the shares and give you an idea of how many shares he had based on the dividend amounts. The 71%/29% allocation came from AT&T's official tax information letter to shareholders regarding the WarnerMedia spinoff. You can still find this document on AT&T's investor relations website under "Tax Information" - it's called the "Information Statement for U.S. Federal Income Tax Purposes." It gives the exact allocation percentages and explains how to calculate the cost basis split between AT&T and Warner Bros. Discovery. One more tip: if you find any old brokerage statements from around that time period, even if they don't show the original purchase, they might show the position value at year-end which could help you work backwards to estimate the original cost basis.

I've been following this thread as I'm dealing with a similar situation with my grandmother's old stock certificates. Just wanted to add a couple of things that might help: If you're having trouble with AT&T's investor relations, you can also try contacting Computershare, which is AT&T's current transfer agent. They sometimes have access to historical records that go further back than what the company's investor relations department can easily access. Their number is 1-800-351-7221. Also, for anyone dealing with really old certificates where the cost basis is completely unknown, the IRS does allow you to use "zero basis" as a last resort - meaning you'd pay capital gains tax on the entire proceeds. It's not ideal, but it's better than making up numbers or spending hundreds on professional research services if the stock position isn't worth that much. One thing I learned the hard way: make sure to document everything you tried to find the original cost basis. Keep records of who you called, when you called them, and what they told you. If you ever get audited, the IRS appreciates seeing that you made a good faith effort to determine the correct basis rather than just guessing.

Great question about zero basis vs. reconstructed basis! If you can establish that the shares were purchased in December 1999 through dividend records on old tax returns, you should definitely reconstruct the basis using historical prices rather than using zero basis. The IRS prefers taxpayers to make reasonable efforts to determine actual basis. Most major public companies use transfer agents - it's not just telecoms. Companies like Microsoft use Computershare, Apple uses Computershare, Disney uses Broadridge, etc. The transfer agent handles the administrative side of stock ownership (transfers, splits, dividends) while the company focuses on operations. Here's the key thing about documentation: if you can prove the purchase timeframe through tax records showing dividends, then use that date to look up the historical stock price. Even if it's not the exact day, using the average price for that month or the closing price on the last trading day of December 1999 is completely reasonable and defensible. The zero basis option should really only be used when you have absolutely no way to determine when the stock was purchased or any reasonable estimate of value. Since you're dealing with a specific time period (December 1999), you're in much better shape than someone who inherited mystery certificates with no dates at all. Keep documenting your research process - it shows good faith effort to get the right numbers rather than just picking the option that saves the most taxes.