AT&T Stock Basis

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The Basics of Basis

To really understand the difficulties behind researching stock basis, you must first learn how to compute basic stock basis. The cost basis of any investment is simply what you paid for it, including any fees and commissions. However, complications arise when there have been changes to the stock. These changes include stock splits, stock dividends, reinvested dividends and capital distributions, as well as changes made to the structure of the company. The following paragraphs will outline the basic methods allowed by the IRS for figuring cost basis, the history behind AT&T, and the computation of cost basis for AT&T Corp. dating back to its pre 1984 divestiture through the present.
Methods for figuring cost basis
The IRS allows for multiple methods for figuring cost basis on stock. The methods allowed are specific share identification, first in first out (FIFO), or average basis. Specific share identification is just what it says; you identify the shares you are selling based on the lot that you purchased them in. With FIFO, the IRS takes the assumption that you sold the first shares you bought. This usually ends up being the least tax efficient way to sell shares, as share prices increase over time and the first share you bought would have the lowest basis. The IRS also allows you to elect to use average basis method. This method allows you to take the average of shares you purchased and multiply it by the amount of shares you are selling. In order to take this election you must send written notice to the broker or servicer of your account. On the following page is an example of a basic computation of basis for each method.

The implication of basis
The importance of figuring out the true cost basis of y...

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...0070654341. Retrieved 14 April 2013 http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4w3MfQFSYGYRq6m-pEoYgbxjgiRIH1vfV-P_NxU_QD9gtzQiHJHR0UAAD_zXg!!/delta/base64xml/L2dJQSEvUUt3QS80SVVFLzZfQV80OEY! http://www.smkinfo.com/DTC%20Pages/Tax%20Basis%20Pages/ncr.htm http://www.cmcsa.com/cost-basis.cfm http://historicalstockinfo.com/attoldfront.html http://www.fundinguniverse.com/company-histories/lucent-technologies-inc-history/ goes with above (International Directory of Company Histories, Vol 34, St. James Press, 2000 http://www.fundinguniverse.com/company-histories/ncr-corporation-history/ goes with above (International Directory of Company Histories, Vol 30, St. James Press, 2000
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