Here's a question we're frequently asked: "What do I do if I'm selling some stock and don't have a record of what I paid for it many years ago? How do I pay tax on it?"

Here's the answer: You must prove the cost of your shares when you sell them. If you can't, the IRS may not allow you a "cost basis" with which to reduce your sale price and compute your gain on the shares. Your entire sales price may end up subject to capital gain taxes. (Gulp!)

The broker's records may be long gone by now. But if you purchased shares directly from a company, it may still have a record of the transaction. If not, you might try to reconstruct a record by finding the canceled check and the stock's price when you bought it in order to determine how many shares you originally bought. Document your process in case Uncle Sammy wants to have a discussion (read: audit) with you about it. If your arguments and analysis seem reasonable, you're probably fine.

Ideally, though, always hang on to your purchase records of stock, property, and other assets.

Read more about this in our Tax Center. Also useful is the IRS website.

And by the way, if thinking about taxes makes your head hurt and you'd like an actual person (a financial pro, no less) to talk to about your financial situation, look into our TMF Money Advisor. It's a valuable service we're offering, featuring customized independent advice from a variety of objective financial experts. You need to make sure you're saving enough and well enough to meet all your needs.