VG warning--always check your cost basis on confirms

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stlutz
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VG warning--always check your cost basis on confirms

Post by stlutz » Tue Jul 09, 2013 12:14 pm

I did an exchange for TLH purposes last week. However, the specific share lot I chose to sell and that showed up on the confirmation screen was not the one that Vanguard actually ended up selling (the used FIFO when actually executing the trade for some reason). I contacted them this morning and they indicated that they will [hopefully] get it straightened out and will send me an updated trade confirmation. Just a word of advice to always double check your trade confirmations to make sure that their computers actually did what you told them to do.

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House Blend
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Re: VG warning--always check your cost basis on confirms

Post by House Blend » Tue Jul 09, 2013 12:27 pm

Here's a related thread that may be of interest:
Vanguard Wash Sale Conundrum - ALERT

ziszew
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Re: VG warning--always check your cost basis on confirms

Post by ziszew » Tue Jul 09, 2013 6:30 pm

stlutz wrote:I did an exchange for TLH purposes last week. However, the specific share lot I chose to sell and that showed up on the confirmation screen was not the one that Vanguard actually ended up selling (the used FIFO when actually executing the trade for some reason). I contacted them this morning and they indicated that they will [hopefully] get it straightened out and will send me an updated trade confirmation. Just a word of advice to always double check your trade confirmations to make sure that their computers actually did what you told them to do.

Same here. All of mine are SpecID and the realized gains/losses shows up using FIFO for some reason, although SpecID is listed for additional lots if more than one is sold at the same time from the same fund. Alerted VG and they are still sorting it out (going on a few weeks now and my account is still showing the erroneous FIFO-for-first-lot problem); I'm going to follow-up in the next few days to see when the fix can be expected.

Seems that something wonky is going on with their basis reporting; extra due diligence is recommended until it is sorted.

stlutz
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Re: VG warning--always check your cost basis on confirms

Post by stlutz » Mon Jul 22, 2013 11:10 pm

As an update, I've now had two people at Vanguard (one by phone and one by secure e-mail) tell me that mutual fund shares aquired in 2012 are non-covered and therefore therefore cost basis doesn't have to be reported by them to the IRS.

What an embarrasment.

rkhusky
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Re: VG warning--always check your cost basis on confirms

Post by rkhusky » Tue Jul 23, 2013 7:00 am

stlutz wrote:As an update, I've now had two people at Vanguard (one by phone and one by secure e-mail) tell me that mutual fund shares aquired in 2012 are non-covered and therefore therefore cost basis doesn't have to be reported by them to the IRS.

What an embarrasment.
This page says that mutual fund shares purchased after Jan 1 2012 are "covered" and the cost basis will be reported to the IRS: http://www.vanguard.com/jumppage/costbasis/index.html.

stlutz
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Re: VG warning--always check your cost basis on confirms

Post by stlutz » Wed Jul 24, 2013 10:25 pm

Finally was able to connect with someone who recognized that there was an error on Vanguard's part. (And related to the other thread from a couple of days ago, I was glad I had printed out when confirmation screen they give you when you enter your order as that provided proof of the instruction I gave).

Apparently the problem is that I had FIFO selected as my default cost basis option. Even though I selected a specific share lot when I made the sale, their system apparently overrides that choice with your default option.

I guess I'm not the only one who's run into this issue as the rep. indicated it would take approximately 3 weeks for their cost basis department to make the fix.

So, the actionable part of this thread: If you invest in VG mutual funds and you think you may want to sell using specific id, be sure to choose that as as your default cost basis option well before actually making the trade.

livesoft
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Re: VG warning--always check your cost basis on confirms

Post by livesoft » Wed Jul 24, 2013 11:05 pm

I thought the actionable part of this thread might be to ditch Vanguard and go to a better performing broker. At least that would mirror some other threads. :)
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