"I-just-woke-up-from-a-30-year-coma-Before-that-I-bought-100-000-in-Sears-stock-You-re-my-accountant-What-s-the-good-news-and-bad-news " Good news #2: You’re a millionaire!!!! (REALLY!) Good news #3: You still have a functioning brain after 30 years in a coma. Good news #4: Check out the Internet! Other news: 1989 was a heck of a year. Poland had elections, Hungary opened its border, the Berlin wall fell, leading to the reunification of Germany a year later. Lots of political stuff has happened, and now Donald Trump is President (it’s a long story). OK, so Sears went bankrupt, but you got money. Suppose you bought your shares in Sears at the beginning of 1989. Back then, Sears Stock (“S”) was trading at about $16 per share. So you would have had about 6,200 shares of stock. But Sears stock paid dividends. From 1989 through 1992, it paid $0.50 in dividends per quarter. That’s $12,400 in dividends per year. That’s $49,600 in dividends through the end of 1992. During 1993, 1994 and the first half of 1995, Sears paid $0.40 in dividends per quarter. So you got another $24,800 in dividends. From the second half of 1995 through 2005, Sears paid $0.23 in dividends per quarter. So this would have netted you another $57,040 in dividends. So you would have over $125,000 in your investment in dividends, plus whatever interest those funds earned until 2019, assuming they were not taken because your account was inactive. But wait, there’s more! In 1994, Sears spun off Allstate. Each Sears shareholder received 0.93 shares of Allstate for each share of Sears. So you got about 5,766 shares of Allstate. In July 1998, Allstate shares split 2:1. So now you would have had 11,532 shares in Allstate. Allstate is currently trading at $94 per share. That’s $1,084,008! This doesn’t even count the dividends you would have gotten on Allstate! We’re not done yet! In 1993, Sears spun off Dean Witter. Each shareholder of Sears got 0.39031 shares of Dean Witter for each share of Sears. You got about 2,400 shares of Dean Witter. Dean Witter then acquired Morgan Stanley, with the new company taking the Morgan Stanley name. In 2000, it split 2:1, so you now have 4,800 shares of Morgan Stanley. Morgan Stanley is now trading at $41.19. So you have $197,712 in Morgan Stanley. Plus whatever dividends you would have earned on this! MORE MORE MORE! Sears was acquired by KMart, and the resulting company was Sears Holding. Sears shareholders got one half of a share, or $50, in the new company called Sears Holding. Who knows what your broker chose while you were asleep. Had they chosen $50, you would have wound up with $310,000 more. Had you taken Sears Holdings you would have wound up with, well, let’s not talk about that. Still, all in all, you did ok! Sources: Sears Dividends Reference Page - Historical Stock Info SEARS FORMALLY SPINS OFF ALLSTATE (Chicago Tribune) .
Bad news #1. Since you were in a coma, you never paid the taxes on your gains, so now you have 30 years of penalties and interest to pay, so yer broke. Sorry Charlie.
there are no taxes on the capital gains since you didn't sell. as to dividends there may be no penalty under the circumstances.
I didn't say "capital" gains, I said gains. Profit. Yah gotta' pay the piper for profits, man. Not to mention, those share conversions also involve gains during the transfer, yes? There is a buy-sell thing in the transference?
This is probably a more likely situation. The disadvantage of Long Term Investing. after your 30 years coma ... Bad news # 1: You’re now a pauper with all the medical bills. Bad news #2: You were a millionaire (on paper ) 20 years ago but you failed to take profit and stock price has come down alot for the past 20 years Bad news # 3: your family members have deserted you because of bad news #1 and #2 Bad news # 4: Check out the Internet and see how stock price for blue chip companies can collapse __________
How’s that 1989 investment doing in Lehman, General Motors, WaMu, Conseco, IndyMac, PacificG&E, Calpine, Lyondell etc etc, plus the rotting carcasses that are still being dragged through the desert like AIG, Fannie, Freddie, etc etc You only read stories about the wealth creating stocks like AAPL, AMZN but never the wealth destruction stocks. 30 years from now someone might be saying “why didn’t I sell AAPL before it tanked 95%”. Just like the GE bagholders
Well, I rechecked my 1099 for 2018, and sure as shit, I have the same scenario you described... A company I had shares in merged with another company in 2018. It is showing as a gain on income due to the selling of one company and purchase of another. So, tell me why my 1099 is not valid? Look man, taxes are all fubar. Don't bogart it. I ain't gonna' argue with you on this. Your scenario sux. If you wake up from a 30-year coma, be glad you'd be require to file, because it means you made money. But as others have pointed out, it seems it would be a real headache. Which is exactly NOT what someone who just came out of a coma really wants. Headaches. Ow.
Apple or Amazon in 1989 or a few dozen biotechs. Index funds. Amazon there would be no tax effect until you eventually sold it. Home Depot or Nike would have been great.