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Important U.S. Federal Income Tax Information for Shareholders Concerning the Chem ours Company Common Stock Distribution July 1, 2015, Dear Shareholder, On June 5, 2015, the Board of Directors of

How to fill out cost basis allocation

How to fill out cost basis allocation:

1. Determine the assets involved: Before filling out the cost basis allocation, identify the specific assets or investments for which you need to allocate the cost basis. This could include stocks, bonds, mutual funds, real estate, or other financial instruments.
2. Gather necessary documentation: Collect all relevant documents that provide information about the purchase or acquisition of the assets. This may include purchase invoices, receipts, brokerage statements, or any other records that show the cost or value of the assets.
3. Calculate the cost basis: Calculate the cost basis for each asset by adding up the original purchase price, any commissions or fees paid, and any adjustments or improvements made to the asset over time. This will give you the total cost basis for each individual asset.
4. Determine the allocation method: Choose an allocation method that is appropriate for your situation. There are various methods available, such as specific identification, average cost, first in-first out (FIFO), or last in-first out (LIFO). Consult with a tax professional or accountant to determine which method is best for you.
5. Allocate the cost basis: Once you have determined the allocation method, allocate the total cost basis among the assets based on the chosen method. This involves assigning a portion of the cost basis to each individual asset based on its value or purchase price.
6. Document the allocation: Record the cost basis allocation for each asset in a clear and organized manner. This will help you keep track of the allocation for tax purposes and future reference. Maintain a copy of the allocation documentation for your records.

Who needs cost basis allocation:

1. Investors and traders: Individuals who actively trade or invest in various financial instruments, such as stocks or bonds, may need to allocate the cost basis for tax reporting purposes. It helps determine the gain or loss on each individual investment.
2. Executors and estate administrators: When someone passes away and leaves behind investments or assets, the executor or estate administrator may need to allocate the cost basis of these assets for distribution or tax purposes.
3. Taxpayers with complex financial situations: Taxpayers who have multiple investments, trades, or assets with varying cost basis may require cost basis allocation to accurately report their income, gains, or losses on their tax returns.
4. Individuals involved in property transactions: Those involved in real estate or property transactions, such as buying or selling rental properties or commercial buildings, may need to allocate the cost basis to determine capital gains or losses.
5. Businesses and corporations: Companies that engage in various investments, acquisitions, or sales may require cost basis allocation to determine the value and tax implications of these transactions. Proper allocation ensures accurate financial reporting.

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