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Author
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Topic: Change in Cost Basis of Assets
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FN_User
Member
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posted 08-02-2001 09:03 AM
 
We need to make changes to the cost basis of some assets that were sold in 2000 and 2001. What would be the best way to handle the changes?We received some stock as a distribution in 2000. We were given the acquisition dates and cost basis for the various tax lots. We have now found out that there should be only one tax lot and that the cost basis and date
of acquisition have changed. Some of these securities were sold in 2000 and some in 2001. I was not sure what the best way to handle this would be and would appreciate your advice.
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Renee
Member
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posted 08-02-2001 09:06 AM
If they are all from complete sales then you can just adjust the cost basis in the A/l info so it will show on the Schedule D correctly.If these are partial sales then delete the transactions. Correct the cost basis in the A/L info and reenter the sale. This will make sure the cost basis for the unsold portion is correct.
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Renée Trudeau
Financial Navigator Int'l
Manager, Technical Services
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FN_User
Member
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posted 08-02-2001 09:08 AM
Do I need to change the beginning balances in 2001? For example, if the asset was sold in 2001, should I change the cost in 2000 and 2001? If the asset was sold in 2000 do I need to adjust beginning balances in 2001 such as retained earnings?
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Renee
Member
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posted 08-02-2001 09:09 AM
If the transaction was recorded with the corrected cost basis, then the capital gain income would be increase(decrease if less) by the amount of the change. Also Unrealized gains and losses would be affected by the same amount but as a offsetting entry.
To be 100% correct then you would need to adjust these accounts by that amount.
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Renée Trudeau
Financial Navigator Int'l
Manager, Technical Services
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