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JanetLewis  
#1 Posted : Saturday, January 8, 2022 10:32:54 AM(UTC)
JanetLewis

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I am putting all of my stocks into what used to be called Porfolio Manager. Years ago our club did raffles and then transferred a share of stock to the winner. My husband won a share of Pfizer. It was transferred to him on 4/04/2003. On the statement there is no cost basis. Do I post the date he received it, but use the cost when my club bought it on 8/12/1999 @ $34.13 or how?
Thanks for any guidance. We have other shares throughout a few years to post so I need to know this.
Janet

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sean  
#2 Posted : Monday, January 10, 2022 9:53:07 AM(UTC)
sean

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If your club has been using our accounting system, this would normally have been entered as a partial withdrawal, which the software would have recorded using the original cost from 08/12/1999, when the shares were transferred.
Pawche  
#3 Posted : Monday, January 10, 2022 4:14:49 PM(UTC)
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Sean is correct that a share transfer to a club member would normally be treated as a partial withdrawal. He is also correct that shares transferred in a partial withdrawal have the same cost basis for the member as the club's cost basis. However, this is a special situation as the member is not reducing their interest in the club when they won the raffle. Treating this as a partial withdrawal would reduce this member's ownership of the club.
Contest winnings are treated as income to the winner. The raffle winning would have a cost basis equal to the Fair Market Value (FMV) at the time the share was won. The winner should claim the FMV of the Pfizer share they won as income on their personal tax return. In this case, the cost basis of the Pfizer share to the winner would be the FMV on the day the share was won. The holding period would also start on that same day. It has been awhile since the contest, so the day of the transfer would probably be OK to use for FMV and holding period. To make things easier, I suggest using the closing price on the contest win date or transfer date. Another easy way to calculate FMV is to use the average of the opening and closing prices on the date chosen. Both of these methods are used to calculate FMV in other situations where a FMV is needed in tax calculations.
Russell

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