Calculating the cost basis for shares you sold

To figure the capital gains taxes you would have to pay on a stock sale, you need the purchase date of the shares you bought, and the price, adjusted for splits, including any reinvested dividends and capital distributions. Brokerages report cost basis for stocks purchases in 2011 and later, but not for earlier purchases. Web tools can help you figure ot he cost basis yourself, or you could go to a tax preparer. But what's the least-costly way to go, and how much time does it take?

A Consumer Reports tester decided to find out how much time and money it would take to find cost basis for long-held shares of stock sold by Cornelia Edmonson of Dobbs Ferry, N.Y.

Our reporter reviewed Edmonson's Form 1099-B, the tax statement reporting proceeds from investment transactions. It included the sale of shares of Bristol-Myers Squibb stock purchased in 1997, but it didn't state the original price paid, the number of shares purchased, or any dividends or capital distributions that may have been reinvested.

TIME: 5 minutes.

On Bristol-Myers Squibb's investor relations page, the reporter clicked on Dividends & Splits, then on Cost Basis Calculator. That led her to an eShareholder page for Bristol-Myers Squibb, which offered up the Netbasis Cost Basis System that the company made available to its shareholders. Netbasis, an independent service, would provide the cost basis for a $25 fee, assuming she had purchase or acquisition dates. The reporter preferred to avoid paying the $25 fee, so she continued to look for free tools on the Web that could provide her with the cost basis.

TIME: 15 minutes.

Learn more about saving money on tax prep with Consumer Reports Tax Guide.

Step 3. One option she considered was TurboTax Premier's online version, which promised to automatically calculate cost basis. (It's free until you actually file a return. In early March, it cost $54.99 at the TurboTax site for just a federal return, and $91.98 for federal and state returns.) The service took her around in circles, asking for the cost basis that she didn't have. Searching in TurboTax Answer Xchange (aka TurboTax Community) for how to determine cost basis, she found that the Cost Basis Lookup feature was discontinued in TurboTax 2014 and future versions. She tried one other free online tool, CostBasis.com, but wasn't able to get it to live up to its name. It showed stock splits but didn't give her the cost basis.

TIME: 30 minutes.

Frustrated, the reporter decided to retry Netbasis. Instead of going through Bristol-Myers Squibb's website, she went directly to the Netbasis website to see whether the fee was lower. Turned out the pricing was identical: $25 for one cost-basis calculation, more for multiple searches. She had trouble getting through initially; Netbasis accepted her $25 payment for a one-time search but wouldn't let her use the system. After about a half-hour on the phone and a half-hour waiting for callbacks from a customer-service rep, she was able to access the service. She found the pages a bit confusing—they seemed designed for professionals—but the "help" explanations were straightforward. Through a feature on Netbasis called "Power Search," she was able to find out how many shares of Bristol-Myers Squibb were originally purchased in 1997, as well as the cost basis.

TIME: 30 minutes troubleshooting; 5 minutes using the calculator.

COST: $25.

The reporter checked with a certified public accountant near Edmonson's home to find out how much money he would have charged for figuring the missing cost basis for her shares. The CPA estimated the charge would be $63 to $125 if the work was done by his assistant.

TOTAL TIME: 1 hour, 25 minutes.

TOTAL DO-IT-YOURSELF SAVINGS (minus the cost for Netbasis): $38 to $100.