How Do You Report "UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS" When Filing Taxes?

This is actually a common issue with free stocks from brokerages! When you receive those promotional free stocks, they're typically considered a gift with a $0 cost basis. Since they're marked as "noncovered" it means your broker isn't required to report the basis to the IRS - the reporting responsibility falls on you. For acquisition date: If these were indeed promotional free stocks, you can check your email for the notification of when you received them. Webull should have sent you something. If you absolutely can't find it, you'll need to make a good-faith estimate. For cost basis: If they were truly free promotional stocks, your cost basis would be $0. This means the entire proceeds would be capital gains. For term determination: If you held them for more than a year before selling, they're long-term. Less than a year is short-term. If you can't determine the exact acquisition date but are fairly certain they were from when you opened the account, you can calculate based on your account opening date. I'd recommend documenting your reasoning in case of questions later. The IRS is generally reasonable about small amounts like this when you make a good-faith effort to report correctly.

I had the exact same issue with some free stocks from Webull last year! I finally figured it out by using https://taxr.ai to analyze my statements. Their AI could tell just from the transaction patterns that they were promotional stocks and even identified the likely dates I received them. Saved me hours of digging through old emails! What I like about them is you can upload all your financial documents from different accounts and it creates a complete picture. It automatically flagged these "undetermined term" transactions and gave me specific guidance on how to handle them in my tax software.

I was really skeptical about using taxr.ai for my "undetermined term" stock issues, but I'm honestly impressed with the results. After trying to figure out these transactions manually for days, I uploaded my documents and it identified the exact promotional stock grants within minutes. The system found an old welcome email I'd completely forgotten about that had the exact date I received the free stocks. It also discovered a pattern matching Webull's promotional stock distribution that confirmed these were indeed the free shares. Even better, it generated a report I could attach to my tax return explaining the situation in case of an audit. Now I'm using it for all my investment accounts. Turns out I had several other cost basis issues I wasn't even aware of that could have caused problems!

Anyone dealing with "undetermined term" issues or other tax document problems should try Claimyr if you need to actually talk to someone at the IRS. I spent WEEKS trying to get through on the IRS phone line to ask about these exact transactions and kept getting disconnected. Used https://claimyr.com and got a callback from the IRS in less than 2 hours! You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that for small promotional stock amounts, they just want a good faith effort to report correctly. They said documenting my reasoning for the estimated acquisition date was sufficient. Such a relief after stressing about this for so long.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway out of pure desperation with my tax issues including those "undetermined term" transactions. It actually worked! After trying for WEEKS to get through to the IRS myself, I got a callback in about 90 minutes. The IRS agent explained exactly how to handle these transactions - for my small promotional stock amounts (similar to yours), they said to use the account opening date as the acquisition date and document my reasoning. They also walked me through exactly how to report it in my tax software. The agent said they see this issue constantly with free brokerage stocks and as long as you're making a reasonable effort to report it correctly, there's no issue. Huge weight off my shoulders!

For these undetermined term transactions, especially tiny amounts from promotional stocks, here's what I did after consulting with my tax guy: Report them as short-term with $0 basis, and include a note about why you're reporting them this way. Most tax software lets you add explanatory notes. The worst case is that you pay slightly more tax (short vs long term rates), but the difference on such small amounts is literally pennies. It's not worth stressing over or potentially delaying your refund for such small potatoes.

Just want to point out that Webull actually has a support line dedicated to tax document questions: 1-888-828-0618. I had similar issues and they were able to look up the acquisition dates of my promotional stocks even after I closed my account. Took about 20 minutes on hold but saved me tons of headache. They emailed me a statement showing when I received the free stocks. Might be worth a try before making any assumptions about dates.

I went through this exact same situation last year with Robinhood promotional stocks! Here's what worked for me: First, check your email archives for ANY communication from Webull around the time you opened your account - they usually send notifications when promotional stocks are deposited, even if it's buried in promotional emails. If you can't find the exact dates, the IRS allows "reasonable estimates" for small amounts like this. Since you mentioned these were likely from account opening, use that date as your acquisition date. For the cost basis, promotional stocks are typically considered gifts with $0 basis, meaning the full sale amount is taxable as capital gains. For the holding period, if you're truly uncertain, reporting as short-term is the conservative approach since it results in higher tax (ordinary income rates vs capital gains rates). The IRS prefers when taxpayers err on the side of paying more rather than less. Don't skip reporting them entirely - even small amounts need to be reported, and the 1099-B means the IRS already knows about the sales. The good news is that for amounts this small ($12.46 and $8.75), the actual tax difference between short and long-term treatment is probably less than $5 total. Document your reasoning and move forward - you're overthinking what should be a minor part of your return!