What is the cost basis of stock rights that are sold?
In April 2018 I received transferrable stock rights from a mutual fund that I inherited in 2016. I sold these rights in May 2018. On the 1099-Bs I received, the sale of rights based on short-term re-investments were listed as a short-term gain with a $0 cost basis. The sale of all the other rights (covered and non-covered) was listed as a long-term loss with the cost basis being the cost basis of the associated stocks. This would result in long-term loss of over $35,000. Shouldn’t this sale be a considered short-term and the cost of all of the rights be $0? If I claim a long-term loss on these rights now, what would be the cost basis of the long-term holdings when I sell the holdings themselves?
I am sure this question has gone 3 weeks with no answer because any financial advisor would be scared to answer it from a liability standpoint. Me included. This is really a question that should be asked to a CPA or professional tax advisor. Possibly an estate planning attorney. Anyhow, I wanted to make sure you got some direction. good luck!
-Jordan Jones, RFC