PRU Cost Basis & Acquisition Date
Prudential de-mutualized Nov 16, 2001. I was issued shares I’ve held ever since. I got “qualified DIV” each quarter for some 19 years & paid LT tax on same. Recently moved shares to Vanguard from Computershare without any CB or Acquisition date, so I will likely NOT be able to benefit from LT taxation unless I can provide Vanguard with Acquisition date. As for the CB, I’ve read on-line that the sum of my premiums less the DIV I’ve received is my CB .. but how do I get Vanguard to buy into that ? Or, how to get Prudential to provide supporting document ? Computershare seems incapable of communicating, nevermind helping. I also understand the IRS may be disputing this CB position, so maybe it’s best to wait it out ? If/when I sell my PRU and my CB greatly exceeds its value, could this capital loss be used to offset other capital gains ? .. I suspect not because (what I’ve read) it’s hard to calculate how much of the premium was for insurance ? Insofar as the acquisition date, I think Vanguard will follow the logic, otherwise I’d have to wait a quarter to get back to “qualified” dividends. Any thoughts are welcome.
Permalink Submitted by Alan - IRA critic on Fri, 2021-03-19 21:52
Since these are non covered shares, no matter who the custodian is, the cost basis will not be reported on your 1099B except for any reinvested divs and you did not mention reinvesting them. Computershare is required to provide VG only with the data that they would have had to report if you did not transfer the account. I suspect that brokers are more than happy to not report cost basis since shares issued in the demutualization process have been subject to two decades of litigation over whether the shares have 0 basis, basis equal to premiums paid, or something in between. Since VG will not show a cost basis on the 1099B, it is up to you what basis you report on Form 8949. 0 is likely to be the current IRS position, so if you report a basis you could be going back and forth with the IRS for some time. It should be easy to establish a LT holding period since all you need is a copy of a statement over 1 year before your sale date. I only did basis internet research on this, and this is not a subject of this forum, but you may want to look into this further if the value of the shares warrants it.