The thing is after I sold some shares the company issued 1099 reflected cost basis of $0 on the shares I sold. Since it’s privately owned I was issued stock certificates and each certificate has a serial number. When I sold shares I picked a stock certificate that was issued during a split.
You don’t have a choice on treatment of a stock split. Basis is divided among all shares. Choosing to sell the added shares received in the split has no effect because all the share have the same basis.
In that case, I would have to do my calculations based on the “correct” basis and not the basis reported by the company on their 1099s. I wonder would that cause IRS to raise their eyebrows and trigger an audit.
Was the 1099B provided to the IRS? There usually is a statement on or accompanying the 1099B that tells you this. Even if it was provided to the IRS,the 8949 used to calculate gain has provisions to make adjustments. If you have the numbers to back up your results, should be no problem replying to any inquiries.