Dear Mr. Berko:

I’m a practicing certified public accountant in Fort Lauderdale, and a large number of our clients have sold some or all of their AT&T stock as well as some or all of the many spinoffs made since 1984.

I have a particularly difficult problem determining the basis for a number of issues (enclosed) for this client’s portfolio and therefore the client’s tax liability. As you will note from my ledger, this client sold parts of various positions during the past two years. I was hoping that you might be able to assist me in determining as closely as possible his basis on these issues.

Your September column on AT&T has been helpful to us this year, and we were hoping that you might be able to simplify the cost basis for us, taking into account the mergers and reverse splits.

M.S., Fort Lauderdale, Fla.

Dear M.S.:

On a few occasions, I’ve assisted readers with their cost-basis questions about the myriad AT&T spinoffs, divestitures, mergers, splits, etc. Since December, I’ve received requests from more than 200 readers to assist them with their cost-basis problems. There are few things more daunting, more time-consuming or more frustrating then trying to figure the cost basis of AT&T’s various parts, pieces and parcels.

Yes, in September, I partially dissected the number of shares, the dollar results and current values of all the 1984 AT&T spinoffs and their companions. But that did not solve the complicated problem for millions of AT&T owners, which is computing a personal cost basis for Ma Bell and her fecund spawn. Now, I’m not going to spend hours calculating the basis for Comcast, Vodafone, NCR, Agere, AT&T Wireless, Lucent, Qwest, etc., for your clients. That’s your responsibility and that’s how you earn your living.

But I will make your job a lot easier. Horizon Publishing Co., which publishes the well-regarded bimonthly Dow Theory Forecast stock market letter has a fantastic piece of software. It covers every corporate action for Ma Bell going back to 1954, as well as the recent spinoff of its broadband unit, its subsequent merger with Comcast plus the company’s recent 1-for-5 reverse split. Its called the AT&T Tax Calculator, and you can get that CD-ROM for $10 plus $3 for wrapping the thing, putting it into a shipping envelope, adding the correct postage and physically taking it from Horizon’s business office to its post office.

I’m familiar with your accounting firm and know that you guys milk millions preparing tax returns for clients across the country. So you and the other lads there should consider pooling your pocket change and send $13 to Horizon. The mailing address is 7412 Calumet Ave., Hammond, Ind. 46324. If you’re in a big hurry and can afford to spend $2 more, you can download the software from its Web site, www.atttaxcalculator.com. The download version will provide you with all updates and upgrades for the next 12 months. When it’s released next year, you won’t have to spend a pfennig, peso or penny for the new download. So considering the probability that a number of AT&T-related companies (Lucent, Agere, Avaya, Qwest) are talking about reverse splits during the coming 12 months, that’s a swell deal.

You need to know that I’m not a computer aficionado, and I’m of the opinion that an awful lot of software is purposely written in unfriendly language. But I must tell you that the AT&T CD-ROM is as easy to use as turning a page. There are no confusing calculations, worksheets, workbooks or tough mathematical equations. It is a hassle-free format. I did it myself and on the second try (I’m not computer literate), it instantly computed the number of shares, basis and the total cost for 13 different issues using a cost going all the way back to 1957!

I used it for my sister who has a pot load of AT&T and all its peripheral issues. Now she knows at any given time, if she decides to sell a portion of the past 45 years of accumulated AT&T issues, precisely what her tax liability will be. It’s as friendly as taking the cap off a bottle of cold beer. Oh, by the way, the cost of the AT&T Tax Calculator may be tax-deductible.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or visit his Web site at www.berkoradio.com.