How to determine cost basis for gifted stocks from the 1960s-70s that are missing purchase information?

When dealing with gifted stocks from that far back, you have what's called a "carryover basis" situation. For gifts, your cost basis is generally the same as the original owner's basis (what your grandfather paid). However, when the original cost basis is unknown, IRS rules provide some alternatives. For the portion where you know the cost basis ($1,000 worth), use that known information. For the remaining $5,000 worth with unknown basis, you have a few options: First, try to make a good faith effort to determine the basis - check historical stock prices for the approximate time period, look for old statements your grandfather might have had, or contact the company's investor relations department. If that fails, you can use a "zero basis" approach - meaning you'd pay capital gains tax on the full $5,000. This is the most conservative approach that ensures you won't underpay taxes. Alternatively, if you have some reasonable estimate of when the shares were purchased (even just the year), you could look up historical prices from that time and use your best estimate - just be sure to document your reasoning.

After struggling with a similar situation with some AT&T shares from my grandmother, I found this amazing tool at https://taxr.ai that literally saved me thousands in unnecessary taxes. They have this historical securities database that goes back to the 1950s and can help reconstruct cost basis for ancient stocks like yours. You just upload whatever info you have (gift date, approximate purchase timeframe, company name) and their system does the heavy lifting to determine the most likely cost basis including all those stock splits and dividend reinvestments that happened over decades. It gives you documented support for your tax filing too in case of questions later. I was about to use zero basis like the other commenter mentioned until I found this service. Definitely worth checking out before finalizing your taxes.

Just wanted to update everyone - I tried the taxr.ai service that was suggested here and it was seriously impressive. I uploaded the info about my grandfather's old manufacturing company stocks (with barely any details honestly) and within a day they sent me a full report showing the likely purchase dates based on family timeline, all corporate actions, and three different calculation methods for the basis. They found that the company had gone through two acquisitions and a 3-for-1 split in the 70s that I had no idea about. The documentation they provided looks super professional - way better than my "best guess" approach. My accountant was amazed at the detail and said it's absolutely sufficient for IRS purposes. Saved me from using a zero basis which would have cost me about $1,100 in unnecessary capital gains tax. Definitely recommend if you're dealing with old securities with missing info.

If you're still having trouble getting records, you might want to try Claimyr (https://claimyr.com). They helped me actually get through to a live IRS agent when I had a similar issue with inherited stocks. I spent WEEKS trying to call the IRS myself with no luck - constant disconnects and holds. Claimyr got me connected to an actual IRS person in about 20 minutes who walked me through the acceptable ways to document missing basis information and what forms I needed. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent told me a lot of people face this exact issue with very old securities and explained that they have specific procedures for handling these cases that most tax software doesn't tell you about.

I have to eat my words and apologize for being so dismissive. After my last post, I was desperate enough to try Claimyr since I had a client with a similar gifted stock situation that needed resolution before filing deadline. It actually worked exactly as described. I scheduled the call around 10am, got a text about 40 minutes later saying they reached an IRS agent, and I was connected immediately. The agent walked us through Form 8939 (Request for Missing Cost Basis Information) that I didn't even know existed - it's specifically for situations like this where historical records aren't available. For anyone dealing with missing cost basis on gifted or inherited securities, this is apparently the proper form to use rather than just guessing or using zero basis. The IRS actually has procedures for these cases that most tax preparers don't know about because they're relatively uncommon. Sorry for being a jerk in my previous comment.

Have you checked with the transfer agent for the company? That's not Computershare or BofA, but the company that was handling the stock when your grandfather purchased it. Sometimes they maintain records going way back or can provide historical price data.

What about using the "First In, First Out" method? If the stocks were purchased in batches, you could assume the ones you sold were from the earliest purchase date and use the oldest price you can find.

I ran into this exact problem last year with some Coca-Cola stock from my great-aunt. If you contact the company's investor relations department directly (not the transfer agent), they sometimes have historical information about stock prices, splits, and dividend reinvestments that can help you piece together a reasonable cost basis. The IRS publication 551 also covers this scenario specifically and allows for reasonable reconstruction of basis when records are unavailable.

For gifted stocks where the original cost basis is unknown, you'll need to use the donor's basis (carryover basis) as your starting point. Since you can't find records from the 1960s/70s, here's what I'd recommend: 1. **Document your search efforts** - Keep records of all your attempts to find the original basis (calls to Computershare, BofA, etc.). The IRS appreciates good faith efforts. 2. **Use historical price reconstruction** - Since you know the approximate purchase timeframe and the company had multiple stock splits, you can research historical prices from that era. Many financial websites and libraries have historical stock data going back decades. 3. **Consider IRS Publication 551** - This publication specifically addresses situations where basis records are unavailable and provides guidance on reasonable reconstruction methods. 4. **Account for all corporate actions** - Make sure to adjust for all stock splits, dividends, and other corporate actions that occurred between the original purchase and when you received the gift in 2008. 5. **When in doubt, be conservative** - If you can't determine a reasonable basis, using zero basis (paying tax on the full sale amount) is the safest approach, though it results in higher taxes. The key is thorough documentation of your research process. The IRS understands that very old securities often lack complete records, so they generally accept reasonable reconstruction efforts when properly documented.