I cashed out my stocks and can't figure out how to do my taxes...

[xkrazybaby67x]

My grandparents gifted me a lot of stocks. I cashed the majority out and put the money in a CD (this was best for me becuase I plan to use the money next year for the purchase of a home and I do not believe the stock market will recover by then). Anywho - I rec'd the 1099-B forms. I feel like I took a loss on the amount. I mean, they were worth SO MUCH MORE last year!

Am I going to have to PAY because of the loss? Also - I think i'm supposed to know when they were purchased.... but they were gifted to me through out various years and my grandparents are now deceased.

HELP!

I'm going to a tax guy and he told me to bring in the dates the stocks were purchased. How do i find out? I'm clueless as to this whole stock thing. ugh.

[Rich Lunsford]

Congratulations on the house purchase coming soon! Assuming you don’t have to pay a penalty for early withdrawal, you could use the CDs to use as a down payment next year. The issue on your stock depends on how you were gifted the stock. If you received the stock as an inheritance from your grandparents, then the value of your stock is based upon the day you received the stock – not when your grandparents purchased the shares. If they did gift them to you during their lifetime, you would need to try to determine their purchase price of the shares. If you don’t know their purchase price, a good CPA can help you determine an average to use for tax purposes.

Once you know your starting value of the stock (either inherited or gifted), then determine if when you sold them, you had a gain or loss. A loss means no taxes to be paid and a possible deduction on your taxes. A gain means that you may be subject to capital gains taxes. Again, a qualified CPA can lead you in the right direction.

The bottom line is that the stock was a gift of love from your grandparents. Use it wisely and enjoy that new house next year!

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.