Stock sale at huge loss: How do I report this on taxes if I can't figure out the prices pd over the years?

My father purchased a ton of stock through his employee stock purchase plan over a period of decades. The stock was valued at $96,000 at one point. Just prior to the employer's bankruptcy, he sold it at a mere $2,500. He wants to report this on his taxes but we can't figure out how to do the basis price because he doesn't have any records to reflect that, just the approximate amounts and period of years he purchased. What does the IRS allow on this, and how can he maximize the tax credit?Stock sale at huge loss: How do I report this on taxes if I can't figure out the prices pd over the years?
what is was ';valued at at one point is not relevant - he may have only paid $3000 for the stock - there are books that have historical year end prices for stocks or you could look it up in microfilmed newspapers - you need to know at least the year the stock was originally purchased





do his past income tax records have any info? W-2's?


you can also only claim $3000 a yr in net losses - the balance gets carried forward, so if he had no other stock transactions for the year, $3000 is all he can deduct on one years tax return





if he bought similar amounts of shares each yr, you can get a pretty close estimate using that end of the yr price method - you should be able to estimate how many shares he bought each yrs if he invested a similar amount each yr





you might have to talk to a CPA to figure this one outStock sale at huge loss: How do I report this on taxes if I can't figure out the prices pd over the years?
Unless his employer gives him a statement showing cost, you will have to make a realistic estimate.


If you can come up with a reasonable estimate, that might work. It would be best if you went to Yahoo finance and got some figures to back up your estimate.





If you have the amount he paid for the stock, from check stubs or any other written support, it would help.





Last, but not least, the IRS will probably not audit his return and will accept whatever you report. So your only worry would be if it was audited or questioned.
First, there is no tax credit for selling stock. There may or may not be a tax deduction.





Second, the fact that the stock was valued at $96,000 at one point is irrelevant. There is only a ';loss'; if the stock is worth less than its original cost. If, for example, the stock was purchased for $1000, then became worth $96,000, and then became worth $2500, then there is a gain of $1500.





If at all possible, get the bankrupt employer to provide records. If not, then do some math and look up historical stock price information on the Internet or in old newspapers. For example, if you know that he bought approximately the same amount of stock each year, divide the total amount of stock that he sold by the total number of years to find the amount of stock per year, look up the price of the stock for each year, multiply to find the amount spent each year, and add the total. If you know that he consistently spent a certain percent of his income on stock, then find out from the Social Security Administration how much he earned each year, multiply by the percentage to see how much he spent that year, and divide by the stock price that year to see how many shares he purchased.
you need to know the basis of his purchase of the stocks, you are concerned about the value


some brokers have a program they can trace the price of stocks and I believe that information is available in law libraries


if his basis is a huge amount above what he is selling it for this will be a long term loss and he can deduct $3000/yr on his Sch D until the loss is used up
Unless he has paystubs and printouts from finance.yahoo.com, I wouldn't even attempt an estimate. Failure to have records is a HUGE issue here.





Even with paystubs, assume he bought the stock at the LOWEST price per year and with a 15% discount.





IRS pub 525.