- 1). Look up the original purchase price of the stock. The brokerage firm you purchased the stock from can supply you with this information.
- 2). Add the amount of the commission you paid when you bought the stock. This information should be included on your purchase confirmation.
- 3). Find the annual dividend statements you received from your brokerage firm. If the stock pays a dividend, you should have received a 1099-DIV form each year you held the stock, and you should have paid taxes on those dividends.
- 4). Add those dividend payments to the original purchase price of the stock and the brokerage commission. For instance, if you paid $2,000 for the stock, paid a $10 brokerage fee and earned $190 in dividends, your total cost basis is $2,200.
- 5). Subtract the total cost basis calculated in Step 4 from the proceeds of the stock sale. You can find that figure on the sales confirmation you received when you sold the stock.
- 6). Determine whether you have a short- or long-term capital gain. If you held the stock for a year or less, you have a short-term gain, and you pay taxes on that gain at your ordinary income tax rate. If you held the stock for longer than a year, you have a long-term gain, which as of 2011 carries a maximum tax rate of 15 percent. You can find the relevant dates on your purchase and sale confirmations.
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